MTN Nigeria – a mobile telecommunication company – has secured the Nigerian Communication Commission’s consent to rent two spectrums from Natcom Development and Investment Limited (NTEL). The telco giant has also renewed its 3G license in the country for another 15 years.
The lease deal worth N4.25 billion covers taxes, regulatory fees, and auxiliary charges and is valid for two years from May 1st, 2023, Nairametrics reports. The telecommunication giant also hopes this will boost its goal of optimizing coverage for all subscribers.
This transaction allows MTN Nigeria to use two spectrums (5HMz Frequency Division Duplex and 10HMz FDD) from NTEL, which cover 19 Nigerian states, as part of efforts to remain ahead of the competition in the industry.
The telecoms giant also paid Nigeria’s communications regulatory agency, the NCC, the sum of N58.66 billion to renew its 3G license which would enable it to provide 3G network coverage for another 15 years, from 1 May 2022 to 30 April 2037.
“This is a significant milestone in delivering our Ambition 2025 strategy. The access to NTEL’S 90OMHz and 1800MHz spectrums broadens our spectrum holdings and improves our 3G and 4G user experience as coverage and capacity will be enhanced by utilizing these spectrums,” says Karl Toriola, the CEO of MTN Nigeria.
MTN’s Ambition 2023 roadmap rests on four major priorities: build the largest and most valuable platforms, drive industry-leading connectivity operations, create shared value, and accelerate portfolio transformation, aside from its mobile and internet service offerings, the company on four growth platforms – fintech solutions (MoMo), digital services (Ayoba), enterprise services, and API marketplace.
Read also: With 5 million subscriptions, South Africa leads the 5G race in Africa
What to expect from MTN’s latest investment
With 4G, and recently 5G, in the future, many would expect MTN Nigeria to pull the plug on 3G. After all, the ISP did unveil 588 sites to expand coverage for major cities in the countries. It paid a $547.2 billion fee to become one of only three telecom operators with a 5G license in Nigeria.
However, the ISP’s 3G license renewal indicates that subscribers can still access the network. This is good news for mobile users that live in remote areas and those unable to upgrade to 4G and 5G-enabled phones due to high cost.
Following a steady decline in local currency value and nail-biting inflation, it has become increasingly difficult for many Nigerians to afford phones with higher internet speeds. In the 2022 State of Mobile Connectivity Report, survey respondents from select rural and urban areas in Nigeria viewed smartphone cost as one of the major barriers to mobile internet use.
The bigger picture
By spending a combined N62.91 billion on spectrum lease and license renewal, the telco remains committed to serving its customers. This can be termed a strategic move as every telco seeks ways to low customer churn. MTN lost 7.6 mobile subscribers in the first half of 2021 due to the NIN-linkage issue.
Despite the threat of newcomer Starlink, MTN maintains a comfortable lead over rivals like Glo and Airtel. The telco had 254.2 internet subscribers in 2022, followed by Glo (164.8 million) and Airtel (163.4 million).
Starlink – a disruptive satellite internet provider – recently joined the Nigerian market with the promise of high speeds and network latency. Although many consider the SpaceX product wildly overpriced, some users have praised the service amidst reported cases of slow connectivity whenever it rains. Even though Starlink is fresh in Nigeria, customers have reported better speeds than other ISPs combined.
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