Nigerian CDMA sale scuppered by injunction

Telkom South Africa’s attempt to sell its CDMA operations in Nigeria could be derailed by a legal injunction filed by the infrastructure supplier Helios Towers. The CDMA business Multi Links reportedly attempted to overturn a ten-year contract with Helios after three years with the claim that it was invalid as it did not bear the signature of a government official.

Helios responded by initiating legal proceedings and has obtained an injunction which prohibits Multi Links from being sold before the matter is settled. Allegedly, Telkom neglected to reveal this information to both the Johannesburg Stock Exchange and the eventual buyer of Multi Links – the Nigerian operator Visafone, with whom Telkom agreed a US$52 million deal in early 2011.

Speculation over the sale of Multi Links was rife before the deal was ever made official, and may in fact have prompted Helios to initiate legal proceedings in preparation. Multi Links’ use of CDMA was a conspicuous contrast with Africa’s predominantly GSM-based networks, and the venture has thus far not been particularly successful, with a 3% share of Nigeria’s fiercely competitive market.

The buyer, Visafone, has only a marginally stronger presence with a 3.6% market share, while African telecom giant MTN has a massive majority of 43.6%; it is challenged by GloMobile and Airtel, which respectively hold 22.5% and 19.7% of the market.

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