Mafab is back in the news, not in the way some of us or even the organisation expected. You remember that little boast of the antelope, the way it would appear at community celebrations, decked in beautiful clothes, high heels and very sharp makeup? The antelope would be the centre of attraction, the cynosure of all eyes. The village hunters had a different plan. They needed a game that could fetch a reasonable sum in the market. The antelope was the unfortunate victim. It appeared in the marketplace, tied to a stake with its back to the ground. Dead. This is a common story in my part of the world. On this page, we promoted the story of David versus Goliath after a little-known Mafab jumped into the ring with established players MTN and Airtel to contest one of the two licences put up for auction in the market by the Nigerian Communications Commission (NCC).
After the auction, on December 15, 2021, we wrote on this page: “We predicted a bruising battle, and so it turned out to be. We sketched the allegory of a David taking down Goliath in the holy books; so it came to pass. I have a friend who is almost clairvoyant in all these things. Last week, we looked at the unfolding story before us and we could nearly arrive at a denouement. In our part of the world, you don’t need any auguries to extrapolate certain things. Ours is a world where fairy tales transmogrify into realities of epic proportions.” We refused to be buried in the excitement following a successful auction but expressed our fears at every opportune moment. We had followed the story of the mobile industry and knew without pretence that 5G service rollout would be even more challenging—in cost and physical deployment. “Now our initial fears in this column are being justified, and this should be a regulatory lesson. The allegory of a David and Goliath doesn’t belong here. Such a humongous licence shouldn’t be given to a rookie struggling for limelight. India has demonstrated this by awarding 5G licences mainly to existing and established operators that are able to pay the licence fees as stated in the licence documents and meet rollout obligations as stipulated,” we wrote on this page on August 31, 2022.
Recent reports on Mafab are to the effect that the organisation is in the process of selling its spectrum assets to MTN, which is the biggest mobile operator in the country. Mafab paid $273.6m for those assets, which it could not really utilise, although, at some point under the previous administration, the regulator claimed some gratuitous service rollout in some parts of the country. I have never been able to confirm this and was really not anxious to do so because service delivery is not something that can be swept under the carpet, as the cliché goes, but kept in the open by people and machines that are connected. This writer has tried to reach MTN, with a particular official shouting that he doesn’t understand what is going on. Just trying to obfuscate the truth with pretentious ignorance? I am not in a position to judge.
The regulator, on its part, has been coy, not wanting to confirm or deny whether there is a spectrum deal discussion going on between the two operators. However, details are already being served that involved in the deal are Mafab’s 2×20 MHz spectrum block in the 2.1 GHz band and its 100 MHz holding in the 3.5 GHz band. This is what I found out. An industry source said, “There is a willing seller; there is a willing buyer. The deed is as good as done.” The transaction details, I gathered, are within the Commission, awaiting regulatory approval. So many things are being taken into consideration at this stage, including how the transaction will affect competition in the industry, and this is a primary demand in the Spectrum Trading Guidelines, 2018, of the Nigerian Communications Commission. Although the scope covers the following transactions—spectrum transfer, spectrum leasing and spectrum sharing—the Guidelines state very clearly that: “If, in the considered opinion of the Commission, a transaction will negatively impact on competition and other regulatory considerations, the Commission may, at its discretion, conduct a public or private inquiry in respect of an application for Spectrum Trading; and no spectrum shall be traded without the parties having obtained the prior, written approval of the Commission.”
The story is more complex than that of “the willing buyer and the willing seller.” The regulator must play its role by looking at the entire documentation, since so much, including finances and other failed obligations, rests on the position of the NCC. And there is so much to look at, an industry source told this writer. At the moment, MTN already has a cocktail of licences, which include: 2.1 GHz, 2.4 GHz, 3.5 GHz, 5.4 GHz, 10.5 GHz, 700 MHz, 800 MHz, 900 MHz and 1,800 MHz, which it uses for 2G, 3G, 4G (LTE) and 5G services, as well as backhaul interconnections between base stations and super base stations. The regulator should be able to weigh MTN’s present capacity and spectrum holding against competition. Meanwhile, it is sit-out time for both parties in the proposed deal, who must wait for the regulator to do its job. What really is happening to Mafab? Is this the end of a fairy-tale journey in the 5G world? Was the regulator derelict in its responsibility for not doing a proper background check on an organisation ready to fork out over $270m? Or was the truth blinded by the availability of such cash?
An NCC source told this writer that Mafab did its documentation well, showing that it had the financial and technical capacity to perform in the 5G ecosystem. Another source within the regulatory agency exclaimed angrily that Mafab shouldn’t have gotten a licence in the first place; now the current administration at the Commission is trying to correct a spectrum sale decision that appeared to have been based on weak considerations. Has Mafab done anything wrong in trying to sell its spectrum assets? Not at all. The Act and the Spectrum Trading Guidelines give the organisation full backing after it meets certain conditions. I am sure those are some of the things being taken into consideration at the moment. Personally, I want to think that the promoters of Mafab are much smarter than some of us and were ready to run a huge risk. They knew that they could take a licence and put it up for sale within a few years for a profit, perhaps? The Guidelines say a minimum of one year under the eligibility criteria. That is good business sense. Should the deal be approved, they will make their profit, and the people would have lost the opportunity of their 5G services.
I think in the future the regulator needs to be more careful in handing out such big licences. Somebody within the regulatory agency told me that Mafab couldn’t have made it because it did not have lower spectrums that could have supported its rollout efforts. It is not always a smart thing to build a rollout business on 5G alone, the source told me. How could the NCC have missed such road signs in taking a far-reaching decision? While the answer may never come, I wish to suggest that the sale be approved in order to put a closure to an inherited bad regulatory decision and give the new owners the opportunity to expand their 5G rollout efforts. Whichever decision is reached, I remain convinced that our nation has no space yet for a young David defeating a war-tested Goliath. Because in this land, a fairy tale will always collapse against challenging realities. During the auction, Airtel took an exit at $270m but lived to make a quick return. I sincerely pray that the regulator can grant Mafab’s wish for the organisation to take a permanent departure from the 5G scene.
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