Capcom may lose its initial approval to operate in the Nigeria’s telecoms sector if it fails to complete the merger of CDMA operators Starcomms, Multilinks and MTS First Wireless, local newspaper This Day reports. ‘The Nigerian Communications Commission (NCC) has the mandate as a regulator to withdraw the approval in principle, if it discovers that Capcom can no longer conclude the transaction it started since 2012 to acquire Starcomms and merge it with Multilinks and MTS First Wireless,’ the NCC’s executive vice chairman Eugene Juwah is quoted as saying. He stated that the regulator has yet to give Capcom a deadline to finalise the transaction, but indicated that the NCC may be forced to withdraw its approval if it becomes clear that no further progress can be made. ‘As a regulator, we feel like stepping into the matter, but by law, we cannot interfere, because it is strictly a commercial dispute between the lead company Starcomms, and the new owners Capcom,’ Juwah noted, adding: ‘Since we do not have the mandate to interfere in such issues, we are waiting for them to resolve it amicably within themselves and give us their next line of action as to whether they are going ahead with the merger or they are pulling out of the entire arrangement.’
As previously reported by CommsUpdate, Capcom reached an agreement in December 2012 to invest USD210 million in Starcomms in return for a 90.5% stake. Capcom – a special purpose vehicle created for investing in Starcomms and related transactions – comprises a number of investors, including MBC, a private trust with a focus on investing in emerging markets, and Pan African Capital through its asset management division, PAC Asset Management. As part of the agreement, Capcom aims to create a national broadband operator by acquiring the spectrum licence of MTS and the CDMA business of Multilinks, and it will provide USD98 million in cash to finance their integration with Starcomms, in a bid to improve its competitiveness in the country’s overcrowded telecoms market.