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.