According to industry reports, the Nigerian telecommunications industry is set to welcome a new player this year. Mafab Communications has announced its plans to launch in the country after securing a 5G license in December 2021. The license was obtained through an auction with a winning bid of US$273.6 million, outdoing Airtel Nigeria, a leading telecoms operator in the country.
Mafab has disclosed that it will build its infrastructure from scratch rather than lease or purchase from existing operators. However, the company must address regulatory issues before proceeding with its plans. Mafab currently lacks a Universal Access Service License (UASL), the operational license for 5G spectrum. It will need to pay a US$414,066 fee to obtain the license, enabling it to provide all telecommunications services such as 2G, 3G, or any other technology. Introduced in 2005, the UASL license covers fixed telephony (wired or wireless), digital mobile services (GSM), international gateway services, national long-distance services, and regional long-distance services.
While it is uncertain whether Mafab has applied for a UASL, the company faces several challenges in entering the market. For instance, it must allocate billions of dollars to establish its infrastructure.
Mafab has made several attempts to enter the market, including holding launch events in Abuja and Lagos in January 2023. However, they did not provide any product demonstrations at these events. By December 2023, the company began promoting its 5G routers for US$55.27 on social media accounts.
Mafab’s entry into the market came when the telecom industry faced revenue struggles due to inflation and currency devaluation. With Mafab’s entrance, the number of telecom players in Nigeria would increase to five, and the number of 5G service providers would increase to three. While this increased competition should benefit consumers, Mafab will require substantial resources to hire skilled personnel and ensure a consistent power supply.
It is anticipated that Mafab will outsource its tower needs; however, it will still have to deal with increasing expenses, mainly driven by energy costs. Despite these challenges, Gbenga Adebayo, President of the Association of Licenced Telecommunication Organisations of Nigeria (ALTON), states that the market awaits Mafab’s launch. According to two anonymous sources with knowledge of the matter, wealthy local investors with substantial political influence in Nigeria back Mafab.
