MTN Involved In A Legal Battle With A South African Competitor

MTN Surges On Strong Earnings
MTN Surges On Strong Earnings

The telecom market is becoming increasingly competitive across the continent. MTN Group Ltd., Africa’s largest wireless carrier, has filed a legal challenge against Telkom SA SOC in order to prevent further delays in South Africa’s long-awaited release of additional broadband spectrum.

MTN said in a statement that it filed court papers on Friday, January 7, to oppose Telkom’s attempt to prevent the Independent Communications Authority of South Africa from auctioning spectrum in March. The auction is viewed by the government as a critical structural economic reform required to revive the country’s coronavirus-ravaged economy by unlocking broadband investments and lowering data costs.

“A successful spectrum auction has the potential to not only release much-needed funds into the national fiscus, but it will have an immediate impact on consumers,” MTN said, adding that the industry has not added any new spectrum in 14 years.

MTN and South Africa’s market leader, Vodacom Group Ltd., have long advocated for more spectrum in order to expand data services and increase revenue.

Despite the fact that the plan was approved in October, Telkom this week filed an urgent court application to prevent ICASA from holding a spectrum auction in March, calling the auction process unlawful and illegal.

The move by Telkom, which won a court order last year ordering the regulator to review its auction process and postpone it until March of this year, could potentially delay the country’s rollout of 5G and expansion of 4G capacity, both of which are seen as critical for access to digital services and lower data costs.

“While the current ITA (Invitation to Apply) is not perfect,” MTN said in a statement, “we believe the regulator has attempted to strike a delicate balance for all players.”
Meanwhile, in Nigeria, the telecommunications industry has long been touted as the country’s new oil. Last year, the sector contributed nearly 18% of Nigeria’s GDP. The speed with which that dream becomes a reality will be largely determined by the rate at which technology is adopted, service quality is improved, and security and infrastructure challenges are overcome.


The Federal Government previously stated that the Five Generation (5G) network will be launched in Nigeria in January 2022, but how soon this will become a reality is unknown.

Nigeria now has nearly 200 million voice subscribers, making it one of the most dynamic markets in the world in terms of brand and marketing. It is also fiercely competitive, but the biggest fight is for second place, where Airtel and GLO have been battling for years.

Airtel currently has a slight lead with 53.7 million subscribers, while GLO is close behind with 52.7 million. 9mobile is in fourth place with 12.6 million subscribers, while MTN has the lion’s share and leads the market with more than 80.3 million subscribers.

Will the latest legal squabble in South Africa have an impact on MTN Nigeria and its battle with its top two rivals, Airtel and GLO? At best, it may be a distraction, but it is unlikely to have a significant impact. Nigeria’s market is extremely profitable. MTN would not want to blink or take its eyes off the ball for too long with Airtel and GLO nibbling at its wings.