New Telecom Operator Emerges in Nigerian Telecoms Industry
The executive vice chairman of the Nigerian Communications Commission (NCC) recently announced the impending entry of a new telecom operator into the Nigerian telecoms industry later this year.
Mafab Communications, a relatively unknown telco company, disclosed its launch plans to the NCC 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.
Infrastructure Plans and Regulatory Hurdles
Mafab’s approach to establishing its presence in the market involves building its telecommunications infrastructure from the ground up, rather than opting for acquisition or leasing arrangements with existing players.
However, before commencing operations, Mafab must address regulatory issues, particularly obtaining a Universal Access Service License (UASL), which is crucial for operating in the 5G spectrum.
The UASL, introduced in 2005, covers a wide range of telecommunications services, including 2G, 3G, and other technologies.
Rotimi Akapa, Partner and Head of Telecommunications, Media, and Technology at Advocaat Law Practice, emphasized the significance of the UASL license and highlighted the associated fee of ₦374.6 million that Mafab needs to pay for compliance.
As of the latest information, it remains uncertain whether Mafab has initiated the application process for the UASL.
Financial and Operational Challenges
The financial implications of building the necessary infrastructure pose a significant challenge for Mafab.
According to Akapa, securing the required funding locally may be a complex task, even if financial institutions express interest.
Beyond regulatory and financial concerns, Mafab’s response to inquiries remains elusive at the time of this report, as the company did not provide comments to TechCabal.
Mafab’s Struggles on the Road to Market
Mafab has faced challenges in its attempts to enter the market.
In January 2023, it held a launch event without a product demonstration, promising to deploy its service in the coming months.
Subsequently, in December 2023, Mafab began promoting its 5G routers through social media, with a price tag of ₦50,000.
The company’s website prompted users to fill in a recharge request form on the ‘Get Mcom 5G’ and ‘View Coverage Area’ pages.
Market Dynamics and Industry Impact
Mafab’s entry into the telecom market aligns with prevailing revenue pressures caused by inflation and currency devaluation.
The telecom industry in Nigeria would see an increase in the number of players, potentially leading to enhanced competition, innovation, and improved service quality for consumers.
However, Mafab’s success also hinges on addressing critical challenges such as resource acquisition, skilled manpower recruitment, and ensuring a sustainable power supply for its operations.
Anticipation in the Telecom Market
Gbenga Adebayo, President of the Association of Licensed Telecommunication Organisation of Nigeria (ALTON), expressed the market’s anticipation for Mafab’s launch, highlighting the need for increased competition to enhance service quality for consumers.
While Mafab is expected to outsource its tower needs to existing operators, the cost implications, particularly related to energy expenses, are noteworthy.
Despite the challenges, insiders suggest that Mafab is backed by wealthy local investors with significant political influence in the country.
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