Fear of Globacom LTE Dominance, MTN Targets Visafone

Competition is the name of the game in the business world; more so, on the mobile phone horizon in Nigeria as everywhere else.

Nigeria’s National Carrier, Globacom, acquired the 700 MHz from the Nigerian Communications Commission. That gives it the capability to do LTE (Long Term Evolution), which is obviously the next big area, thereby laying the foundation for reality on the broadband.

Globacom is the only operator that has the licence on the 700 MHz spectrum. Not wanting to be beaten to second place in the LTE offering, MTN now wants to acquire Visafone’s licences, that is, the 800 MHz and the 700 MHz, the latter which is LTE-compliant, to also quickly latch on them and begin offering LTE in Nigeria.

LTE is a wireless broadband technology designed to support roaming Internet access via cell phones and handheld devices. Because LTE offers significant improvements over older cellular communication standards, some refer to it as a 4G (fourth generation) technology along with WiMax.

With its architecture based on Internet Protocol (IP) unlike many other cellular Internet protocols, Long Term Evolution supports browsing Web sites, VoIP and other IP-based services well. LTE can theoretically support downloads at 300 Megabits per second (Mbps) or more based on experimental trials. However, the actual network bandwidth available to an individual LTE subscriber sharing the service provider’s network with other customers is significantly less.

Long Term Evolution service is only available in limited geographic areas, but telecommunications providers have been actively expanding their LTE services.

It will be recalled that MTN bought VGC Communications; a private telephone operator whose services were seen as very reliable, although it was almost a Lagos-based operator.

MTN acquired the company due to its spectrum and the fibre ring it has across Lagos. This was also another proactive move by MTN to prepare itself for landline telephony services, especially as Glo has licence and apparent capability to offer landline telephone service.

VGC Communications Limited (VGCCL) was bought for $70 million (N9.3 billion) in 2006, by MTN Nigeria.

VGCCL was licensed by the Nigerian Communications Commission (NCC) to provide cabling and radio telephone services nationwide and had laid extensive fibre optic cables, and internet service provision.

The company was established in April 1995 with the primary objective of providing all the communications related services required by the residents of Victoria Garden City and Ikota shopping Complex area of Lagos state.

Now, here is how the MTN’s Visafone deal would have to be wrapped up sooner than anyone might guess: Globacom has set a deadline of June 1 to launch LTE services. The company only recently held series of meetings, taking presentations from all the leading vendors and network equipment companies, among them Huawei, ZTE, Nokia Networks, Ceragon, on launching LTE services on June 1.

In fact, the company has already hired a leading international technology consulting company on this area for the purpose.

Glo’s plan is to launch LTE services in six cities of the country in the first phase of the planned nationwide launch.

And, as the planned take-off of Glo’s LTE services on June 1, continues to gain momentum, MTN is not leaving anything to chance; hence, the race to finalise the deal for the purchase of Visafone as soon as possible.

Visafone also has the spectrum for the operations of LTE, just like Glo; MTN’s calculation therefore is to quickly acquire Visafone and put itself in good stead for real showdown with Glo come June.

Meanwhile, Nigeria government has declared year 2015 as the Broadband year and for mobile operators, the most technically advanced technology for broadband offering is the Long Term Evolution, hence the race to acquire the necessary but scarce spectrum to enable them roll out services and offer broadband.

Currently there are 279 commercially launched LTE networks in 101 countries and 482 LTE network commitments in 147 countries. (GSA March 2014).