MTN, Mafab Emerge Winners Of Nigeria’s 5G Spectrum Auction

MTN Nigeria and Mafab Communications Ltd have emerged winners of the contested 3.5 GHz spectrum auction for 5G deployment which raked in a total of $547.2 million for the federal government to be paid $273.6 million each. The auction took place yesterday at the Transcorp Hilton Hotel in Abuja between three eligible bidders that are MTN Nigeria, Mafab Communications, and Airtel Networks Limited. The three bidders were in the contest for a slot in the two available slots of 100MHz each in the 3.5GHz spectrum license. The Minister of Communications and Digital Economy, Dr. Isa Ibrahim Pantami, who was in attendance declared the auction opens.

According to Pantami, “The National Policy noted the key role of the National Frequency Management Council in the allocation of spectrum for the deployment of 5G networks in Nigeria. The NFMC is also to ensure that the required spectrum for 5G standard is made available in the most appropriate and timely manner to enable investments, innovation, and competition in the deployment of 5G services for the benefit of consumers and businesses.” The Minister added that the main spectrum auction followed the successful mock spectrum auctioning process, which was held on December 10. The mock auction exercise was held last Friday with the eligible bidders before the main auction which took place yesterday.

MTN was represented by its Chief Executive Officer, Mr. Karl Toriola, Mafab Communications Limited was represented by its Chairman, Alhaji Musibau Bashir while Airtel Networks was represented by its Chief Financial Officer, Mr. Sreeddhar Krishna Menon. In other to qualify for the bidding process, the companies had to comply with the condition of paying a 10 percent non-refundable deposit of N750 billion ($197.4 million). Each bidder paid about N7. 5 billion each to qualify for the bid.

Before the process commenced, the Auction Manager, who is the Director of Spectrum Administration at NCC, Oluwatoyin Asaju, assigned each of the three bidders their bidding rooms and accredited one representative from each of the bidding operators as a monitoring agent. Mafab Communications was assigned to bidding room one and monitoring room two, MTN had bidding room two and monitoring room three while Airtel was assigned bidding room three and monitoring room one. At the commencement of the bidding process, Asaju announced that the first round of bidding was mandatory but each bidder was at liberty to exit at any of the bidding rounds. The three bidders participated in the bidding process until the 11th round in which Airtel Networks exited at $270 million while MTN posted an exit bid of $273,000,000, giving way to the assignment stage

The main auction result for provisional licenses was eventually announced by the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, after Airtel Nigeria had dropped off from the race due to a lower exit bid, thus leaving Mafab Communication and MTN Nigeria as winners. According to Danbatta, both winners had to enter into another auction stage called the Assignment Stage. The aim of this stage was to determine which operator takes a particular lot of the two lots that were auctioned. In the end, MTN Nigeria made an offer of $15,900,000 to get lot one of the spectrum, while Mafab Communications paid made an offer of $11, 120, 000 million to get lot two.

Danbatta, in his opening speech, disclosed NCC’s goal to continue to deepen broadband penetration, protect the consumers and also see to the smart deployment of infrastructure across the country. Danbatta also disclosed that “We are committed to strategically playing our unique role in driving the digital economy to support the government’s economic diversification agenda. Consequently, we ensured the implementation of policies tor effective communications resource management, strategic collaboration, and partnership, facilitating broadband penetration and improvement of Quality of Service (QoS)/Quality of Experience.”

Danbatta also revealed that “The auction is based on the powers bestowed on the commission by Section 121 of the Nigerian Communications Act 2003 as well as the Licensing Regulations 2019.” The rigorous bidding process which commenced at 11 am, and lasted for 8 hours eventually came to an end at 7 pm. The bidding was keenly contested by all parties involved. The NCC Vice Chairman later announced that full payment for the license would be made in Naira by both winners of the bid by February 24, 2022.

The NCC Vice Chairman congratulated the winners and thanked the Federal Government for its continuous support and commitment to the actualization of 5G technology in Nigeria, which, is aimed to bring significant network improvements, including higher connection speed, mobility, and capacity as well as low-latency capabilities to communications services in the country.