MTN NIGERIA, a unit of the MTN Group, cemented its position as a leading mobile operator in that country, after securing the 100MHZ spectrum licences in the 3.5GHz spectrum band that will be used for the fifth generation (5G) network during an auction by the Nigerian Communications Commission (NCC), the company said yesterday.
The licence was awarded a month after MTN Nigeria received an in-principle approval from the Central Bank of Nigeria to operate mobile money services, with the aim of driving financial inclusion.
Commenting on the award, MTN Nigeria chief executive, Karl Toriola, said 5G was the future of technology and offered the possibility of new and advanced services for customers.
“Our successful bid represents an opportunity to be at the forefront of these technological advancements to as many Nigerians as possible,” said Toriola.
The auctioning of 5G aims to enable faster download in voice, video and data and reduce the cost of internet connectivity in Africa’s most populous country.
“The benefits of 5G are multi-faceted and they hold the key to unlocking new avenues for the nation’s growth and development. It is far more than high-speed internet or faster-streaming speeds, 5G has implications for improved service delivery across every service,” said Toriola, adding that 5G was able to boost the country’s economy.
The auction is reportedly a bonanza for the Nigeria Federal Government which raked in a total of $547.2 million (R8.7 billion) at $273.6m per lot of 100MHZ.
MTN Nigeria, Airtel and Mafab Communications were pre-qualifying as bidders for the spectrum auction held on Monday. Airtel exited the bid and after 11 rounds of bidding, MTN Nigeria and Mafab emerged as the winners. MTN Nigeria is the biggest mobile operator in that country, with a subscriber base of 70 million. Airtel is number three by numbers after GoMobile. Mafab is a generally unknown entity.
Peter Takaendesa, the head of equities at Mergence Investment Managers, said MTN Nigeria had continued to leverage its strong balance sheet and market leadership in Nigeria to acquire additional spectrum and licences through the normal auction process, as well as by acquiring other smaller operators that owned spectrum.
“MTN Nigeria will have to navigate carefully over time to avoid ending up being declared a dominant operator in mobile data services by the regulators, which could impair their ability to fully monetise their spectrum advantage in the country,” he said.
Takaendesa said it would take some time for the winners of these 5G spectrum licences to realise returns on their investment, but this would put MTN Nigeria in a stronger position if they executed well over the next three to five years.
“What we find quite difficult to read is why locally owned Glo did not participate in the auction at all and why Airtel Africa exited the bid at $270m, leaving Mafab Communications and MTN Nigeria as the winners of the 5G licences. It is also not clear why only two lots of 5G spectrum were made available at this stage,” said Takaendesa.
MTN is in the process of finalising its public offering of just under 3 percent shares in MTN Nigeria as part of plans to further localise 14 percent of the group’s holding in MTN Nigeria over the medium term.
dineo.faku@inl.co.za
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