MTN pays FG N18.96bn for 10-yr broadband license, N80bn for fine

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Telecommunications Operator, MTN Nigeria, yesterday shelled out a whopping N18.96 Billion to the federal government of Nigeria as payment to slots it won in the 2.6GHz spectrum auction carried out by the Nigerian Communications Commission (NCC) recently.

This is also as the operator announced payment of  N30 billion agreed first tranche of the N1.04 trillion fine which was reduced to N330 billion recently. Added to the earlier N50 billion it paid to the federal government, the network has paid a total of N80 billion as part of the fine.

NCC said the spectrum guarantees superior performance for wireless networks, especially 4G LTE services.

Declaring MTN winner after the auction in May, the commission expressed dismay that only the telecom operator which bidded for 30 MHz out of the 70 available showed interest and contended that MTN had won a ten-year frequency spectrum licence for the 2.6GHz band.

It also confirmed that ‎MTN’s bid was in full compliance with the relevant provisions of the Information Memorandum (IM) for the exercise even as a 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. MTN is seeing its success in this auction as 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.

Confirming the payment yesterday, MTN Nigeria CEO Ferdi 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 has 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.

“I am also 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 N50billion which we paid in good faith and without prejudice on February 24, this means we havenow paid a total of N80 billion.”

“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 license 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 USD 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.”

Prior to the award of the spectrum to MTN, NCC declared the auction open, transparent and competitive process in which all operators – local and foreign; enjoyed equal and unfettered rights of participation in line with its 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% increase in broadband penetration is resulted to a 1.4% increase in 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.

Written By Prince Osuagwu (Hi-Tech Editor) Emeka Aginam & Emmannuel Elebeke