MTN Pays Another N30bn of N330bn Fine, Wins 2.6 GHz Broadband Licence

The Nigerian Communications Commission (NCC) has declared MTN as winner of its latest auction for a 10-year frequency spectrum licence for the 2.6GHz band, which guarantees superior performance for wireless networks, especially 4G LTE services.

MTN has also paid an additional N30 billion of its N330 billion fine as part of the agreement it reached with NCC to make installmental payments for a period of three years to clear the entire fine.

The Chief Executive Officer of MTN Nigeria, Ferdi Moolman, who confirmed the additional payment of the MTN fine, said: “In addition to winning the spectrum licence, we are also delighted that the matter of the fine imposed by the NCC was amicably settled in the interest of all parties. I am pleased to announce that the first payment of N30 billion in the terms of settlement has already been disbursed to the NCC. In addition to the earlier payment of N50 billion which we paid in good faith and without prejudice on February 24, this means we have now paid a total of N80 billion.”

The NCC had earlier confirmed that MTN’s bid was in full compliance with the relevant provisions of the Information Memorandum (IM) for the exercise in which MTN emerged as sole approved bidder.
Although Nigeria is one of 28 African countries that currently offer 4G/LTE services, the rate of penetration is restricted to a few major cities.

As such, MTN’s success in this auction is a big boost to its plan to deliver global mobile broadband and LTE 4G services to over 60 million customers in Nigeria.

It also plans to use FDD networks in addition to its existing WIMAX over TDD networks, as this provides for greater consistency with existing 2G and 3G deployments.

Moolman stated that “After complying with all the requirements for the 2.6GHz auction and making the licence payment of N18.96 billion to the NCC, MTN was been issued a letter of award. With the 2.6 GHz band, we expect to roll out and provide the full range of LTE services to Nigerians, empowering Nigeria with the latest mobile broadband technology.”

The award of the spectrum by the NCC was further to an open, transparent and competitive process in which all operators – local and foreign; enjoyed equal and unfettered rights of participation in line with the NCC’s desire for transparency and ensuring a level playing field for all. The NCC has described this spectrum as a significant trigger for a broadband revolution that will unlock benefits such as greater coverage, access, affordability and innovation, with the customer at the centre of these gains.

Studies by McKinsey have shown that a 10 per cent increase in broadband penetration is associated with a 1.4 per cent increase in Gross Domestic Product (GDP) growth in developing markets.
As such, the knock-on effect on individuals, businesses and multiple sectors of the economy signal far reaching implications for socio-economic growth and development.

According to Moolman, “We are very pleased with this development at this time, which is a further step in the right direction for Nigeria. Indeed, MTN is fully aligned and supports the NCC’s objective to deliver broadband services to present and future generations of subscribers, in line with the National Broadband Plan of 2013.”

He added: “This licence acquisition further demonstrates MTN’s abiding faith in the future of Nigeria and the resilience of the Nigerian economy. MTN continues to believe in Nigeria and we have expressed this belief in the level of our investment, which currently stands at approximately $15 billion and counting.

“We strongly believe that there is need for significant levels of investment in broadband infrastructure and services to truly launch Nigeria into the information age. We are honoured to be the arrowhead.”

By Emma Okonji/Thisday