L
LequteMan
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Nigeria - Recently, Bloomberg reported that MTN Nigeria is in the process to acquire Jim Ovia's Visafone service in a bid to enlarge its local market.
Nairametrics has listed three reasons why Zenith Bank's Jim Ovia is selling his communications company to MTN:
Weak Financial Muscle - The CDMA business has been a drain pipe on the resources of Visafone. It is capital intensive and requires billions of naira in capital expenditure to compete with the more popular and profitable GSM business.
Competition - GSM operators are currently snuffing the life out of CDMA businesses in the company. Years ago CDMA have been the early movers in the mobile data business and cornered a sizeable market share but nowadays the GSM operators with deep pockets have poured in hard cash into advertising and promotions and taken hold of the market. Add Internet service providers (ISPs) to that list and what you have is a death blow.
Loans - Zenith Bank’s 2014 annual report also shows Visafone is owning it a sum of N345million which could likely be at the risk of not being paid or serviced adequately. This also excludes other loans with other banks locally or abroad. With competition about to snuff them out, a deal with MTN makes a whole lot of sense.
#Nigeria #Zenith #CDMA #JimOvia #Visafone #Nigeria
Nairametrics has listed three reasons why Zenith Bank's Jim Ovia is selling his communications company to MTN:
Weak Financial Muscle - The CDMA business has been a drain pipe on the resources of Visafone. It is capital intensive and requires billions of naira in capital expenditure to compete with the more popular and profitable GSM business.
Competition - GSM operators are currently snuffing the life out of CDMA businesses in the company. Years ago CDMA have been the early movers in the mobile data business and cornered a sizeable market share but nowadays the GSM operators with deep pockets have poured in hard cash into advertising and promotions and taken hold of the market. Add Internet service providers (ISPs) to that list and what you have is a death blow.
Loans - Zenith Bank’s 2014 annual report also shows Visafone is owning it a sum of N345million which could likely be at the risk of not being paid or serviced adequately. This also excludes other loans with other banks locally or abroad. With competition about to snuff them out, a deal with MTN makes a whole lot of sense.
#Nigeria #Zenith #CDMA #JimOvia #Visafone #Nigeria