Article Summary
- MTN Nigeria has secured the approval of the Nigerian Communications Commission to lease NTEL’s spectrum which covers 19 states.
- The company also paid N58.66 billion to renew its 3G licence for another 15 years.
- This development confirms that MTN will not be shutting down its 3G service even as it continues to invest in 4G and 5G expansion.
The Nigerian Communications Commission (NCC) has approved a spectrum lease transaction between MTN Nigeria and Natcom Development and Investment Limited (NTEL).
The deal would enable MTN Nigeria to lease two spectrums from NTEL (5HMz Frequency Division Duplex and 10HMz FDD) which cover 19 states in Nigeria.
The transaction cost MTN Nigeria N4.25 billion, according to a corporate action filed by the telco and seen by Nairametrics. The transaction cost included taxes, regulatory fees, and auxiliary charges. Also, note that the spectrum lease is for a 2-year period, starting May 1st, 2023.
The company also disclosed that the telecom regulator has also renewed its 2100MHz spectrum for a period of 15 years, effective from 1 May 2022 to 30 April 2037. This spectrum enables the telecom company to continue to provide 3G services on its network. For this spectrum, MTN said it has also N58.66 billion to the NCC.
Ambition 2025 strategy
Describing the development as a milestone in the company’s Ambition 2025 strategy, MTN Nigeria CEO, Karl Toriola said:
- “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 utilising these spectrums.”
The ‘Ambition 2025’ is MTN’s strategy to accelerate long-term business growth in Nigeria while leveraging emerging opportunities. Built on four key strategic priorities, Ambition 2025 informs MTN’s current and future projects as the company moves to create leading digital platforms for Africa’s progress while providing the tools to ensure the connectivity to access those opportunities.
What it means
With the renewal of its 3G licence for another 15 years, it is now certain that MTN will not be shutting down its 3G service even as it spends more on expanding its 5G service across the country. This will allow people in rural communities, who cannot afford 4G or 5G phones to continue to enjoy access to the internet on their 3G devices.
Globally, the expansion of 5G has pushed internet service providers like AT&T and T-Mobile to shut down 3G service earlier in 2022, and most recently, Verizon and Vodafone have notified customers that they intend to cut off 3G-enabled devices from their networks from December 2022 and December 2023 respectively.
3G is the third generation of wireless mobile telecommunications technology which was first rolled out commercially in mid-2001 and was an upgrade over the 2G, 2.5G, GPRS and 2.75G networks. At the moment, it has been succeeded by the launch of 4G, 5G and most recently, a test run of 6G in China which is a super upgrade to the service.
In Nigeria, MTN was the first telecom operator to launch commercial 5G in September 2022 and the company is further boosting its 3G and 4G services with the latest spending on additional spectrum.
What are the likely impact of the spectrum lease on MTN services to their customers and the bottom line of the company.