Groups win Nigerian telecoms licenses
Groups win Nigerian telecoms licenses
ABUJA (AFP): Telecoms consortiums backed by operators from South Africa and Zimbabwe and one from Nigeria emerged Friday as winners of three mobile phone licenses in a billion dollar auction here.
The three consortiums agreed to pay an asking price of US$285 million a license. A fourth license granted to the state-run operator will also now be set at $285 million, pushing revenue well past the one billion dollar mark, organizers said.
The three consortiums winning the licenses in the auction were named by officials as Communications Investment Ltd. (CIL), based in Nigeria; Econet Wireless Nigeria Ltd., based in Zimbabwe; and MTN Nigeria Ltd., based in South Africa.
The bidding began on Wednesday at $100 million with five consortiums in the running.
After two days, all five were still in the auction, but after five rounds, two dropped out as the price was pushed to 295 million dollars.
In a statement, telecoms agency chief Ernest Ndukwe said that as the two unsuccessful bidders had dropped out as they were unwilling to pay more than 285 million dollars, it was "appropriate" that should be the price for the winners.
"The auction has been designed to deliver the ideal outcome: the strongest bidders have come through the process," he said.
"The government has raised over one billion dollars, more than twice the original budget expected. Consequently, the government will be able to use the funds raised for the public benefit," he added.
The two groups that dropped out were United Networks Mobile Ltd., backed by Egyptian group Orascom Telecom, and MSI-Celtel Nigeria Ltd.
The auction organizers dismissed fears that the high license fee would push up costs for the end-users.
"The winning bidders in this auction have prepared very detailed business plans and have much experience in delivering mobile telephony services," Ndukwe said.
"The fact that we will have four operators keenly contesting the market will ensure that consumers will not get ripped off," he added.
"Furthermore, having spent so much on the licenses, the winning bidders will have every incentive to build out their infrastructure as quickly as possible."
Ndukwe said the auction showed that Nigeria had been able to complete the sale in a "completely transparent" way.
"We can now look forward to four national operators delivering much needed digital telephony services to the benefit of all Nigerians," he added.
Nigeria, Africa's most populous country with more than 120 million people, has one of the continent's least-developed telecommunications sectors, hence one of the greatest potentials for expansion.
The winners will be required to redeem their bids within 14 days and start operating within three months.
In a statement issued after the auction, MTN Nigeria predicted that the Nigerian telecommunications market would grow to over 10 million subscribers in ten years.