Legal dispute threatens Multi Links sale - Mobile World Live

Legal dispute threatens Multi Links sale

23 MAY 2011

The sale of Multi Links, the Nigerian CDMA business of Telkom South Africa, looks to be in jeopardy, due to an earlier dispute between Multi Links and infrastructure provider Helios Towers. According to local publication Thisday Live, Multi Links and Helios had a ten-year agreement in place, but three years into the contract Multi Links claimed that it was not binding because it had not been signed by a government official. Helios took the action to the courts, and was granted an injunction which prevented the sale of Multi Links until the dispute was resolved. Telkom is said to have withheld this information both from the Johannesburg Stock Exchange and Visafone, the Nigerian operator which subsequently agreed to buy Multi Links. Earlier this year, Telkom inked a deal to sell the unit for US$52 million, representing a huge loss on the business.

There was talk that Telkom was planning the Multi Links sale for a long period before the transaction was announced, which is likely to have led Helios to seek an injunction ready for when this took place. It was noted that Multi Links was a gamble on the wrong technology, due to its use of CDMA, rather than the GSM-family networks which are otherwise prevalent in Africa. According to Wireless Intelligence data, Multi Links has around a 3 percent market share of the competitive Nigerian market, with fellow CDMA operator Visafone having a 3.6 percent share. The market is dominated by MTN, with a 43.6 percent share, and with competitors Glo Mobile having 22.5 percent and Airtel 19.7 percent.

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