Nigerian CDMA Networks to Merge - Migrate to LTE

Published on: 1st Nov 2012

­Nigerian CDMA network operator, Starcomms says that it has secured a capital investment of cash and assets valued at US$210 million. The investment comes from investment firm, Capcom.

As part of the deal, Capcom will merge the spectrum licence of MTS and the CDMA mobile telecoms business of Multi- Links with Starcomms.

At the end of the deal, Capcom will own 90.5% of the merged company.

The proposed transaction will create a single CDMA operator in Nigeria and represents a fundamental step as part of the consolidation move in the Nigerian telecoms industry. With the benefit of the 20 MHz of contiguous 1900MHz spectrum to be held by the consolidated operations, Starcomms plans to migrate its network over to LTE services.

Starcomms has recently faced severe operational and financial challenges on account of the shifting competitive landscape in Nigeria's telecommunications industry. The recent challenges have resulted in the Company operating with an unsustainably high level of debt and a stagnating operating performance.

The agreement is subject to Starcomms shareholder approval.

The company's Board of Directors said that they believe that the proposed transaction represents the best option available to Starcomms to effect a strategic turnaround, improve the Company's financial position and retain value for its stakeholders.

Starcomms' Interim CEO, Olusola Oladokun commented: "The proposal from Capcom will enable Starcomms to reduce its high level of borrowings and improve its low liquidity position. Given the significant challenges the business has faced over the last two years, Capcom's investment will facilitate a strategic turnaround, improve the competitive position in the market and place the Company on a growth path for the future."

 

Tags: [starcomms]  [cdma]  [Nigeria]