Nigeria: Airtel wants 5G licence without auction while MTN wants another 5G license

We reported in October 2022 that Nigeria is set to auction two additional 5G licences. Now the top two mobile telcos have come up with interesting requests.

Airtel says it wants the Nigerian Communications Commission (NCC) to grant it the licence without going through the process of auctioning. MTN on the other hand, one of the initial winners in the first auction, says it would like NCC to allow prior successful winners to participate in the upcoming 5G auction.

A little background is needed here for those who do not have background information.

Nigeria planned to auction four 5G licences. In December 2021, the Commission conducted an auction of the first two (2) lots of 100 MHz TDD in the 3.5 GHz band which MTN Communications Nigeria and Mafab Communications Limited emerged winners. Each paid the reserve price of $273.6 million per licence.

Now NCC wants to auction the remaining two 5G licences where Lot A (3400-3500MHz) and Lot C (3600-3700MHz) are opened for the bidders and is currently engaging stakeholders on the Draft Information Memorandum (IM)

At a stakeholders meeting held in Abuja on Tuesday, Airtel Africa requested that it should be granted administrative assignment of spectrum to provide 5G services in the country, having participated in the last auction. This means that it did not want to go through an auction, but to be allocated one of the new 5G licences at the reserve price of $273.6 million.

Airtel’s argument was that its participation in the last bid round in the 3.5GHz spectrum led to boosting Federal Government’s revenue as the auction led to the increase from the initial reserve price of $197.4 million set by the NCC.

Note that Airtel Africa withdrew from the first auction after its final bid of $270 million was surpassed by the other two, MTN and Mafab who won. The company said that the firm will monitor the market and possibly explore affordable 5G services to meet the broadband demands of its subscribers.

NCC however declined the request saying that it would only assign spectrum through open, transparent and competitive bidding.

Another drama came up at another stakeholders meeting this time in Lagos, on Wednesday.

MTN Nigeria said that it wanted NCC to allow prior successful winners to participate in the upcoming 5G auction.

According to Edoyemi Ogoh, Assistant Director Technical Standard and Network Integrity Department, NCC at the presentation of the response received earlier from stakeholders on the draft IM, MTN “had respectfully reiterated its prior recommendations that, to ensure that all the spectrum can be assigned and used efficiently, it will be appropriate to allow successful bidders in the prior auctions of spectrum in the 3.5GHz (or indeed any other spectrum band) to participate in future awards. It is in MTN’s considered view that a cumulative cap of 200MHz in the 3.5GHz would be appropriate across all awards in the band.”

NCC responded by saying, “Comment received. Other stakeholders’ views are also needed on this.”

In the Question and Answer session, some stakeholders reacted that the allocation of another 5G licence to MTN Nigeria would make the company a dominant player and this would not allow other players grow and compete well in the industry.

In MTN’s defence, Ikenna Ikeme, General Manager, Regulatory Affairs at MTN Nigeria said that MTN had entered the last auction in 2021 with the expectation that it was an open market and it would be allowed to participate in other auctions should the need arise

NCC Executive commissioner, Technical Services, Ubale Maska, responded by saying that there would be more consultations on this issue but however stated that the telco’s request isn’t the first in the telecommunications industry as there are precedents and Nigeria is an open market. He cited USA, Germany, Finland, among others as countries.

Some other stakeholders companied that the reserve Price of $273.6 million was too high considering the current economic situation in the country.

Innovation Village awaits NCC’s decision on MTN’s request. MTN is already the foremost mobile telco in Nigeria with 38.33% of the 212,201,578 subscribers as at September 2022.