MTN Nigeria Communications Plc (NGX: MTNN) emerged as one of the winners of the 5G spectrum auction. MAFAB Communications Limited clinched the second licence on offer. Airtel Networks Limited, the Nigerian subsidiary of Bharti Airtel, lost out of the 5G network race in Nigeria.
MTNN announced the success of its bid in a corporate statement released on the Nigerian Exchange on Tuesday.
The Nigerian Communications Commission (NCC), had on Monday December 13, 2021, conducted an auction for two 100MHZ spectrum licences in the 3.5GHz spectrum band.
Acquisition of the spectrum will enable MTNN and MAFAB rollout 5G services to their respective customers in Nigeria, it said in the statement.
Fifth generation (5G) mobile network technology offers faster data speeds and lower latency. It allows several devices o be connected at one go and creates vast possibilities in innovation and transformation.
5G will enable seamless communication and interconnectivity between smart devices, a process commonly called the internet of things. It has the potential to accelerate the digital transformation of industries.
Commenting on the outcome, MTN Nigeria CEO Karl Toriola said;
5G is the future of network technology and offers incredible possibilities for new and enhances services for our customers. Our successful bid presents an opportunity to be at the forefront of delivering these technological advancements to as many Nigerians as possible.
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 of faster-streaming speeds; 5G has implications for improved service delivery across every sector. It has the potential to transform our nation’s economy and make a difference in the daily lives of every Nigeria.
We thank the NCC for organizing a transparent auction which will transport us into the “tomorrow” we desire.
The auction came on the eve of the conclusion of MTNN’s public offering of 575 million shares to Investors, at N169.00 per ordinary share.
How the Bid went
The auctioning was organised on Monday, November 13, in Abuja, by NCC, in conjunction with the Ministry of Communications and Digital Economy. The bidding was in 2 stages/rounds; first the Main stage and then the Assignment stage.
Investogist gathered that the initial bid entry fee for round one was raised by the auction manager from $197,400,00 to $199,374,000 before the bid started.
At the end of round one, the Auction Manager increased the reserve price to $201,367,740 million for the commencement of round two. At the end of round two, the Auction Manager, again, increased the bid price to $204, 288,256.1 million for the commencement of round three.
At the end of round three, the bid price for one lot of the 3.5GHz Spectrum was increased to $215,782,901.38 at the beginning of round five.
Round six of the auction began with $224, 414,217.43 bid price per lot, and all the three eligible bidders were still in competition.
From round seven, the bidding time was reduced to from 20 minutes to 10 minutes. The round seven commenced with $231,146,643.96 bid price per lot, while round eight commenced with $240,392,509.71 million bid price per lot, with all the three eligible bidders still in in the competition.
Round nine commenced with all three eligible bidders with a bid price of $251,210,172.65 million.
Round 10 commenced with all three bidders with a bid price of $263,017,050.77 million, while round eleven also commenced with all three bidders with a bid price of $275,904,886.25 million. The main stage auction eventually ended at about 7.22pm with round eleven, with a winning bid price of $273,600,000 million.
Airtel Nigeria dropped out in the eleventh round, leaving MTN Nigeria and Mafab Communications to battle for the final round, called assignment stage.
During the assignment stage, both companies were expected to submit another bid for their preferred spectrum, resolve any possible conflicts and decide when payment would be made.
MTN Nigeria offered $15,900,000 for the first slot which is 3500-3600mhz, while Mafab Communications paid for the second slot of 3700-3800mhz worth $11,120,000.
This means Airtel Nigeria will miss out on the first set of telcos to launch 5G network to their subscribers, and risk losing their users in search of the new generation network to MTN and Mafab.
NCC’s Executive-Chairman, Professor Umar Danbatta, who announced the results, maintained that the commission followed due process for the bidding with the winners expected to pay on February 24, 2022, with the prevailing Central Bank of Nigeria (CBN) exchange rate.
He recalled that the allocations at the international level were granted approval for 5G trial in Nigeria in November 2019.
Danbatta said;
“The auction held successfully today, Monday, December 13, 2021, at the Transcorp Hilton Hotel, Abuja with the three bidders competing for the available two slots. The Commission adopted the Ascending Clock Auction format which ended after Round 11 and proceeded to the Assignment Stage. It is my pleasure to announce that at the end of the auction, Mafab Communications Limited and MTN Communications Nigeria Limited emerged as provisional licence winners.
“Arising from the above, the Winning Bid Price for the Auction is USD$273,600,000 for each lot of 100 MHz TDD.’’
“The Provisional Licence Winners are expected to pay the Winning Bid Price less the Intention-to-Bid Deposit, by Feb. 24, 2022. We are happy to state that the Auction process was efficient, fair, well-organised and transparent, and was designed to deliver the ideal outcome.
“Accordingly, the strongest bidders have emerged provisional winners, raising a substantial amount for the Federal Government. Today’s auction represents a culmination of all the efforts at the international and national levels that have prepared Nigeria for this momentous leap forward.
“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 5G network is expected to bring sustainable network improvements, higher connection speed, mobility and capacity as well as low latency capacities to Communications services in Nigeria.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
