Airtel grabs 5G license with $316.7m

*As 5G spectrum now rakes in over $863m into government coffers

Airtel 5G
5G: Airtel is now in the loop

Airtel Nigeria has made up for the costly slip that made it lose out in the 5G auction of December 2021 by quickly grabbing the opportunity when it called again late last year. And, to seal its position as one of the Nigerian telecom operators to provide the robust network services to its teeming subscribers, it finally acquired the spectrum license from the Nigerian Communications commission, NCC, Monday at the cost of $316.7 million.

In December 2021, Airtel, in a surprising manner, dropped off the bidding of first and second lots of the 3.5 Ghz Spectrum auction necessary for the deployment of 5G technology in Nigeria, leaving its major competitors, MTN Nigeria and another industry under-dog, MAFAB Communications as winners.

While the two were signed into the lot 1 and 2 of the spectrum respectively, at the winning price of $273.6 million respectively, Airtel ran out of gas in the bidding at $270m, leaving Information and Communications Technology, ICT industry watchers perplexed.

Meanwhile, MTN and MAFAB were also to go ahead with additional $15,900,000 million and $11,120,000 million respectively to seal winners of Lot1 and Lot 2 respectively.

The development had shut the network out of serious 5G discussions while keeping MTN and MAFAB on the limelight despite the latter has hardly lifted a finger in preparations to deploy the services to Nigerians for over a year it acquired the license.

However, another opportunity called for Airtel last year when the NCC announced the availability of the remaining lot in the 3.5GHz spectrum. Like the giant it has always claimed in the African telecom business environment, Airtel rose stoutly to claim the sole bidder status, making it impossible for the NCC to carry out auction on the spectrum.

Airtel 4G
4G: Airtel already has a good reputation in providing 4G services

What happened was that the commission had in November 2022 held a stakeholders meeting where it spelt out the Information Memorandum, IM on the availability of the spectrum lots and requested for bidders. The commission also set December 5, 2022 as deadline for making expression of interest payments.

Two bidders, Airtel Networks and another operator, Network and Connections Limited, known as Standard Networks were said to have indicated interests.

However, on December 7, NCC revealed that as at Monday December 5, 2022 deadline to pay the expression of interest fee, Standard Networks did not comply but rather applied for 12 working days extension. And, so, it eventually knocked out of the bidding, leaving Airtel as sole bidder.

Apparently to seal its position as one of the Nigerian telecom operators that will provide the robust network services to its teeming subscribers, Airtel announced Monday, that it had finally paid for the license at the cost of $316.7 million.

The sum, according to Airtel Africa which made the announcement will be paid in Naira, the Nigerian currency.

The sum brings the total figure generated by the 5G license alone at over $863 million. Recall that while  inaugurating the National Shared Services Centre, a one-stop-shop for ministries, departments and agencies (MDAs) to interface with citizens, in Abuja, recently, President Muhammadu Buhari disclosed that auctioning of the 5G spectrum generated $547 million into federal government coffers, applauding the contributions of the digital economy in driving growth, creating employment and generating revenue for the country.

The building also houses a cybersecurity operations centre, network and call centres.

Announcing the acquisition, Airtel said the sum was for the purchase of 100 MHz of spectrum in the 3500MHz band and 2x5MHz of 2600MHz.

The spectrums will support the telco’s investments in network expansion and enhances its offerings in mobile data and fixed wireless home broadband capability, including 5G rollout. They are also expected to provide significant capacity to accommodate the network’s continued strong data growth in the country for better customer experience.

5G auction
5G auction in 2021: Minister of Digital Economy, Isa Pantami, (5th from right) NCC EVC, Prof Umar Danbatta, (4th from right), other NCC officials and representatives of bidders in the 5G auction, Dec, 2021 in Abuja

An excited Airtel Africa CEO, Segun Ogunsanya, said: “Nigeria is a market with enormous potential for future growth in mobile services. Investment in new technologies and local infrastructure to enable this growth is a strategic priority for the Group and will ensure we are able to provide reliable and affordable services to local communities across the country. 5G is critical to these ambitions, and we look forward to launching new services to drive further digitalisation across the country, facilitate economic progress and transform lives across Nigeria.”

Airtel Nigeria is Airtel Africa’s largest market, with significant growth potential. The company led the industry in providing affordable 4G services across the country following the deployment of a fully modernised network which facilitated a 4-fold increase in data traffic over the last three years.

The penetration of data customers in Nigeria remains low, providing significant opportunity for future growth.

Ogunsanya said the acquisition of 5G spectrum will underpin Airtel’s growth strategy by enabling the launch of higher speed connectivity to enhance customer service and accelerate digitalisation for consumers, enterprises and the public sector. 5G  has key benefits of  engendering higher speeds, lower latency, significant network capacity as well as an improved user experience.

5G also helps accelerate efficiency of fixed wireless access products across the country and may contribute to Airtel Nigeria’s progress in meeting the National Broadband Plan targets.

According to Ogunsanya, “the acquisition of 2600MHz spectrum will complement our already strong spectrum position in the market to enhance network capacity and future-proof our growth opportunity”.


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