Airtel Nigeria announced on January 9, 2023, that it had completed the purchase of 5G spectrum as well as an additional spectrum for its 4G network for 316.7 million dollars.
According to a statement released by the Nigerian branch of Airtel Africa, the decision was made as part of the company’s commitment to enhance the level of higher-speed connectivity that is available in Nigeria by utilising 5G cellular technology.
According to Airtel, it paid the Nigeria Communications Commission (NCC) a total of $316.7 million in Nigerian naira to purchase 100 MHz of spectrum in the 3500MHz band and 2×5 MHz of spectrum in the 2600MHz band. Both of these amounts are expressed as a gross consideration.
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The Impact of Airtel’s Purchase
The purchase of additional spectrum increases Airtel Nigeria’s current capacity in preparation for the introduction of 5G technology. This purchase is a strategic component of a larger plan to strengthen Airtel Nigeria’s mobile data network as well as the capacity of its fixed wireless home broadband service.
This is Africa’s largest telecom market, and two early birds have already won operational licences for 2021. The company’s goal is to earn itself a good place in the fifth-generation technology segment of this market, and they want to gain the timely traction necessary to do so.
The document reads, “The acquisition of 5G spectrum will underpin our growth strategy by enabling the launch of higher speed connectivity to enhance customer service and accelerate digitalisation for consumers, enterprises and the public sector.”
Airtel Nigeria lost an early opportunity to operate 5G technology in Nigeria when, in December 2021, big rival MTN Nigeria and Mafab Communications snapped up the two available permits at the premier auction arranged by the NCC. This caused Airtel Nigeria to miss out on the opportunity to run 5G technology in Nigeria.
While MTN kicked off its activities in August, Mafab asked the regulator for a five-month delay on the debut date of its own business, which is scheduled this month.
Both Airtel Africa and the MTN Group consider Nigeria to be their most important market.
MTN, Airtel, others compete In second 5G license auction in Nigeria
Events That Followed Airtel’s Purchase
After the announcement hit the market on the same day, shares in Airtel Africa increased by 5.2 percent to N1,630 per unit on Lagos’ Customs Street at 13:28 WAT. This pushed the company’s market value above N6.1 trillion, making it the largest of any publicly traded company in the country.
Airtel Nigeria has given its customers assurances that the expansion effort will make connectivity easier at a faster rate, which will allow for greater customer service delivery and a faster pathway to digitalization for consumers, enterprises, and the public sector.
The company is considering “the (shallow) penetration of data users in Nigeria,” a country in which the Alliance for Affordable Internet estimates that less than 44 percent of the population has access to cellphones, and which the company views as a potential opportunity for expansion.
Segun Ogunsanya, CEO of Airtel Africa remarks, “Nigeria is a market with enormous potential for future growth in mobile services.”
“Investment in new technologies and local infrastructure to enable this growth is a strategic priority for the group and will ensure we are able to provide reliable and affordable services to local communities across the country,” he included.