MTN, MultiChoice To Conclude Acquisition Talks In June

FUNSHO AROGUNDADE

The talk on plans by the MTN Group to acquire Africa’s leading PayTV, Multichoice Africa will be decided before the end of June, sources at the telco head office in Johannesburg, South Africa have hinted.

This is coming two years after MTN acquired a N34 billion licence to provide digital pay television broadcasting services in Nigeria, and spent additional N25bn to get the service running in May 2016.

The National Broadcasting Commission had said in September 2015 that it gave MTN Nigeria part of the country’s 700MHz broadcasting spectrum solely for the purpose.

Talks between MTN and MultiChoice have been ongoing since the last quarter of 2016, it was confirmed from two of the management employees on Tuesday.

“Should we (the MTN Group) finally come to agree to terms with MultiChoice, which is expected to happen before June ending, then the pronouncement will be made in July,” one of them said.

The source added, “Well, the whole gambit depends on the outcome we get from MultiChoice Nigeria, which is the cash cow for the pay television company.

“MultiChoice realises that in whatever acquisition plan it wants to get into, the Nigerian market must be strongly considered, given its peculiarities and the dynamics from rival companies.”

The source, however, added, “But above all, MTN is particularly bothered that the country (Nigeria) where it has its highest number of telecommunications subscribers will not be able to meet the June 2017 deadline for digital migration, despite having failed to meet the earlier deadline of June 2015. So, it is of the conviction that the acquisition will only present a stronger frontier to give Nigerians the opportunity to watch TV, even on their smartphones, after June 2017.

“Other countries in Africa that will be affected by the digital migration deadline will also benefit from the opportunities inherent.”

Bloomberg has broken the news that Nasper Ltd, the parent company of Multichoice was considering the sale of its pay-TV business in Africa as sluggish economic expansion in key markets stifles growth and viewers switch to cheaper online alternatives.

Naspers and MTN Group, Africa’s largest wireless operator, have briefly discussed a deal for MultiChoice Africa, but no agreement was reached.

In October 2016, the MTN Group acquired a fibre networks company, Smart Village from Multichoice in South Africa.

Smart Village is a multimedia and telecommunication services provider that offers fibre-optic access to gated communities with about 29,000 residential homes on their platform.

But a sale of MultiChoice Africa would represent a further shift by Cape Town-based Naspers away from its traditional media business, which includes newspapers and MultiChoice’s main product, the DSTV satellite-TV service.

Since winning big with a 2001 investment in Chinese technology company Tencent Holdings Ltd., a stake that’s now worth about $107 billion, Naspers has become a serial investor in internet companies around the world, ranging from an online travel agency in India to education software providers in Silicon Valley.