“Nigeria’s Telecom Landscape Anticipates Arrival of New Operator Later This Year”

The Nigerian telecoms industry is set to witness the entry of a new player later this year, as confirmed by the executive vice chairman of the Nigerian Communications Commission (NCC). Mafab Communications, a relatively unknown telecom company, revealed its launch plans to the commission after securing a 5G license in December 2021 through a successful auction, outbidding established operators like Airtel Nigeria with a bid of $273.6 million.

Unlike many competitors, Mafab is opting to build its telecommunications infrastructure from the ground up rather than acquiring or leasing from existing players. However, before proceeding, the company needs to address regulatory issues, notably obtaining the Universal Access Service License (UASL), which is the operational license for the 5G spectrum. The UASL license, granted in July 2022, allows Mafab to provide various telecommunications services, including 2G, 3G, or any other technology.

The UASL, introduced in 2005, covers a broad range of services such as fixed telephony, digital mobile (GSM) services, international and national long-distance services, among others. The license comes with a significant fee of ₦374.6 million, reflecting the high stakes and financial commitment involved in the rapidly advancing telecom industry.

Building out the necessary infrastructure for 5G services will incur substantial costs, potentially reaching billions of dollars. Securing such funding locally might pose a challenge, even if financial institutions were interested. Despite attempts to reach out to Mafab for comments, the company has remained silent on its plans.

Mafab's previous attempts to enter the market include a launch event in January 2023, where it announced plans to deploy services in a few months without a product demonstration. In December 2023, the company started promoting its 5G routers on social media, signaling its intentions to enter the market. The entry of Mafab, if successful, would increase the number of players in the telecom market to five, with three providing 5G services.

The current telecom landscape faces revenue pressures due to inflation and currency devaluation, making Mafab's entry potentially timely for consumers who would benefit from increased competition and innovation. However, Mafab must overcome challenges such as procuring skilled manpower, ensuring sustainable power generation capacity, and managing growing expenses, particularly driven by energy costs.

Despite these challenges, Gbenga Adebayo, President of the Association of Licensed Telecommunication Organizations of Nigeria (ALTON), emphasizes the market's anticipation for Mafab's launch, highlighting the need for increased competition to enhance service quality for consumers. Notably, sources suggest that Mafab is backed by wealthy local investors with strong political ties in the country, indicating potential support and influence within the industry.