MTN’s proposed Mafab deal sparks spectrum debate

MTN Nigeria's potential acquisition of Mafab Communications' 5G spectrum has reignited a debate on the value of the $273.6 million spectrum block and its impact on future competition and investment in Nigeria's mobile market. While no final deal has been finalized, the talks have prompted concerns over the balance between the benefits of increased spectrum for MTN and the implications for other operators.

Mafab and MTN both paid $273.6 million for a 100MHz block in the 3.5GHz band during the 2021 5G spectrum auction, with MTN subsequently paying an additional $15.9 million for a 3500-3600MHz block. Mafab, however, was assigned the 3700-3800MHz block without additional payments. The auction aimed to support the introduction of 5G and provide more operators with high-capacity spectrum.

The potential deal could give MTN, which already controls half of Nigeria's mobile market, more frequency resources for deployment alongside its existing network infrastructure. However, Telecom consultant Ejikeme Onyeaso pointed out that the regulator faces a difficult balance between enabling service quality improvements and altering the competitive position of non-concentrated operators.

Additionally, industry insiders questioned why Mafab did not develop a stronger independent ecosystem around the spectrum it acquired and whether acquiring more 5G spectrum should precede a clearer assessment of how additional capacity would be utilized. Concerns about the high cost of building a 5G network and the limited number of consumers with compatible devices have also been raised.