* Cyprus to become innovation hub for new product development *
The Shacolas Group and joint venture partner Panos Germanos of Greece, have agreed to sell the remaining 50% in MTN Cyprus to the MTN Group, making it a wholly-owned subsidiary of the South Africa-based telecom giant.
The deal, worth 73 mln euros, involves the sale of the 50% stake in MTN Cyprus held by the joint venture, Amaracos Holdings, to MTN’s regional holding company in Dubai, with the Cyprus partners pledging to continue their support for the MTN sales network of 22 stores.
MTN Group, a multi-billion telco listed on the Johannesburg Stock Exchange with 185 mln customers in 22 countries, said that the move is part of it’s “broader strategy to make Cyprus an innovation hub for the development of new products and services.” It is also the Group’s sole foothold within the European Union.
The deal follows the announcement that Cyprus CEO Pieter Verkade would be leaving in early 2013, who returns to the MTN Group to help boost the business and development side.
MTN entered the Cyprus market in July 2004, initially as Areeba, the alternative provider that won the first mobile license in an auction. Nearly three years later, the MTN Group took over Investcom LLC, the holding company that owned the Cyprus license which also had telecom operations in ten countries in the Middle East and Africa.
Since 2008, MTN Cyprus absorbed the retail operations of Infotel (Germanos chain of telco stores) and business broadband provider OTEnet Cyprus, and raised its local presence from 105,000 mobile subscribers and a 14% markets share to 316,000 in September 2012, with a share of nearly 33%.
Implementing a 20 mln euro investment, MTN Cyprus recently upgraded its entire telecoms network in collaboration with Huawei Technologies Co Ltd. to offer reliability, speed and greater coverage throughout the island.
State-owned Cyta had maintained a monopoly in the telecom sector since independence in 1960, and continues to enjoy an absolute majority in fixed-line telephony, while it is a leading player in broadband services and the primary mobile operator.
Newcomers such as PrimeTel switched from leasing Cyta’s network for its mobile network to MTN, in a deal announced in January, while broadcasters and telcos such as LTV and Cablenet, are competing in a near-saturated market for triple play services (TV, Internet, telephony).
MTN will continue to enjoy a better reach within the younger mobile and Internet consumers and will also gain access to PrimeTel’s high-speed international network.
“MTN Cyprus is well established within a market that has good potential for accessing innovation and knowledge sharing that can benefit the overall MTN group,” said MTN Group CEO Sifiso Dabengwa.
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