Nigeria’s 5G Race Heats Up as Airtel Acquires New License

Airtel Africa has acquired 5G spectrum capacity in Nigeria, one of the region’s largest economies.

The news, announced by the company this week, means that Airtel will become just the third network operator that has been issued a 5G license by the Nigerian Communications Commission (NCC).

It follows an auction for the new high-speed spectrum license that saw Airtel emerge as the only bidder after another company, Standard Network, failed to pay the necessary deposit to make a bid.

Airtel will pay the NCC $316.7 million in local currency for the additional spectrum capacity, which it said “will support our investments in network expansion for both mobile data and fixed wireless home broadband capability, including 5G rollout.”

In a previous auction, Airtel’s bid was beaten by MTN Nigeria and Mafab Communications, each paying $273.6 million for the country’s first 5G licenses last February.

Since then, MTN has launched commercial 5G services across Nigeria, rolling out 218 5G sites across the country, per the company’s Q3 2022 earning statement.

Critically for Nigeria’s digital economy, 5G coverage is not limited to mobile internet but is also used to deliver broadband to homes and businesses.

Given that fixed broadband penetration is an important benchmark for digital transformation, providers have sought to increase internet speed by deploying additional spectrum bands such as the newly auctioned 5G capacity.

For MTN Nigeria, a 5G license has helped the firm deliver an average download speed of 470 megabits per second while it onboarded over 430,000 new users in the year to Q3 2022. During that period, MTN’s Africa-wide data revenue including broadband services rose by 50.1%, dramatically outpacing the 4.5% growth in voice revenue the company reported within the same timeframe.

Airtel 5G Deal Increases Competition

The MTN launch helped Nigeria to become just the third African nation to roll out a 5G network after South Africa and Kenya. And while Mafab Communications’ launch was granted a 5-month extension by the NCC in August due to a delay in obtaining the final operational license, it is likely that the firm would have been ready to launch 5G services by the end of the month without the delay.

In comments reported by Nairametrics, the chairman of Mafab Communications, Mushabu Bashir, said the company was “fully committed” to bringing the benefits of 5G services to Nigerians, adding that it “will help deliver improvements in the fields of education, business, smart cities and entertainment.”

For now, the prize of greater choice and more competitive pricing is up for grabs as Airtel edges one step closer to launching its own 5G services in Nigeria.

And with greater availability, the opportunities created by 5G’s faster connection speeds and enhanced download and upload capacity are expected to have far-reaching benefits for Nigeria’s digital economy.

In addition to clear beneficiaries such as video streaming and online gaming businesses that require fast internet to deliver their services, for example, 5G is also set to shake up the retail sector by enabling advances such as mixed reality shopping, more dynamic personalization and better frictionless checkout experiences.

For all PYMNTS EMEA coverage, subscribe to the daily EMEA Newsletter.