How Mafab, IHS Deals Could Make Tinubu A Major MTN Shareholder – Report

Top telecom industry sources have alleged that a series of transactions involving Mafab Communications, IHS Towers and MTN Nigeria are part of a broader arrangement that could ultimately make President Bola Ahmed Tinubu a major shareholder in MTN.

The sources, who claimed to be familiar with the transactions, told SaharaReporters that the latest moves involving Mafab and MTN represent the culmination of a process designed to create a significant MTN ownership interest for Tinubu.

“This is the final step for Bola Tinubu to become a major shareholder in MTN and it was all orchestrated via Karl Olutokun Toriola.”

Toriola is the Chief Executive Officer of MTN Nigeria.

The allegation comes as Mafab Communications, one of Nigeria’s two original 5G spectrum licence winners, is reportedly negotiating the transfer of its spectrum assets to MTN Nigeria.

The proposed transaction covers Mafab’s 100MHz holding in the 3.5GHz band and 2x20MHz allocation in the 2.1GHz band.

The financial terms have not been disclosed, and the transaction requires regulatory approval from the Nigerian Communications Commission (NCC). Recent reports said the deal could be concluded as early as October if regulatory approval is obtained.

At the same time, MTN Group is moving towards completing its proposed $6.2 billion acquisition of IHS Towers, a transaction that would give the South African telecom giant control of the tower company across its major African markets.

The Federal Competition and Consumer Protection Commission (FCCPC) has made approval conditional on MTN selling up to 30 percent of the Nigerian component of IHS to local Nigerian investors at market prices over time. MTN has said it is comfortable with the condition.

The sources allege that the two developments, the Mafab transaction and the IHS takeover, should not be viewed in isolation.

The Mafab Connection

Mafab emerged alongside MTN as a winner of Nigeria’s 3.5GHz 5G spectrum auction in December 2021.

The NCC officially confirmed in February 2022 that both companies had paid $273.6 million each for 100MHz blocks. MTN subsequently paid an additional $15.9 million at the assignment stage to obtain its preferred spectrum block.

Mafab later launched its Mcom 5G service but struggled to build a significant nationwide network.

Now, nearly five years after the auction, the company is seeking to transfer major portions of its spectrum to MTN.

According to reports, Mafab is backed by businessman Musbahu Muhammad Bashir, who chairs the Althani Group. Reports say its 10-year licence, issued in 2022 and expiring in 2032, has remained largely unused.

Meanwhile, Mafab is seeking regulatory approval for the transfer, with sources saying the deal could be completed as early as October.

SaharaReporters’ Earlier Mafab Investigation

SaharaReporters had previously reported allegations linking Mafab to Tinubu.

In a May 2023 report, the newspaper reported allegations that former Communications and Digital Economy Minister Isa Pantami and former President Muhammadu Buhari’s personal secretary, Sabiu “Tunde” Yusuf, were involved in moves to grant spectrum licences to companies linked to political associates during the final months of the Buhari administration.

That report also identified Mafab among companies alleged to have benefited from the process and reported allegations linking the company to Tinubu.

The report said sources had alleged that licences involving the 600MHz spectrum were being granted to companies connected to political figures and associates, while a source within the presidency told SaharaReporters that the arrangement included a 50 percent discount on the licence.

Those allegations were part of the backdrop to questions raised about Mafab’s emergence as one of Nigeria’s two 5G licence winners.

Mafab has publicly been associated with businessman Bashir, while allegations connecting the company to Tinubu have previously been denied by the NCC and disputed by parties involved.

The new telecom sources, however, have now alleged that the ownership question goes beyond the identity of Mafab’s publicly known promoters.

‘They Paid For Mafab Through Alpha Beta’

The sources specifically alleged that Mafab’s original licence acquisition was financed through Alpha Beta Consulting LLP, a company long associated with allegations concerning Tinubu.

“If you check when they paid for their NCC licence, they had money paid for them from Alpha-Beta Consulting LLP,” the source alleged.

SaharaReporters could not independently verify the alleged payment trail from Alpha Beta to Mafab.

The NCC, however, officially confirmed that Mafab paid $273.6 million for its 100MHz 3.5GHz spectrum licence by the February 24, 2022 deadline.

The allegation is significant because Alpha Beta has for years been linked to Tinubu in public allegations and court disputes.

SaharaReporters has previously reported on allegations concerning Tinubu’s relationship with the company. Former Alpha Beta Managing Director Dapo Apara had alleged that Tinubu concealed his control of the company, while the allegations were disputed by the company and other parties.

Apara’s allegations were the subject of litigation and an eventual out-of-court settlement.

Sources are now asking that Mafab’s original financing be examined against this background.

‘They Never Used Their Licence’

The telecom sources also questioned the circumstances under which Mafab obtained the 5G licence and subsequently sought to transfer its spectrum.

“Mafab, if you check when they paid for their NCC licence, they had money paid for them from Alpha-Beta Consulting LLP,” the source said.

Mafab did launch 5G services in Abuja and Lagos in 2023, although its subsequent footprint remained limited. The company has since been seeking to transfer its spectrum assets to MTN.

IHS Takeover: The Other Side Of The Arrangement

The sources also linked the Mafab transaction to MTN’s much larger proposed acquisition of IHS Towers.

MTN Group already owns about 25 percent of IHS and has agreed to acquire the remaining shares in a transaction valuing IHS at approximately $6.2 billion.

The deal would make IHS a wholly owned subsidiary of MTN and lead to its delisting from the New York Stock Exchange.

The acquisition represents a reversal of the telecom industry’s longstanding sale-and-leaseback model, under which operators sold towers to independent infrastructure companies such as IHS and then leased them back.

MTN is now seeking to bring that infrastructure back under its control.

In Nigeria, however, regulators have imposed a major condition.

The FCCPC requires MTN to sell down up to 30 percent of the Nigerian component of IHS to local investors at market prices over time.

Meanwhile, MTN is reportedly seeking Nigerian investors for the stake, which could be worth between $900 million and $1.1 billion. The identities of prospective investors have not been publicly disclosed.

‘They Were Behind The Forced Sales For IHS’

The sources alleged that officials involved in the Nigerian regulatory process around the IHS transaction were also involved in what the source described as efforts to force the sale of IHS.

“They were behind the forced sales for IHS with Idris Alubankudi, Special Adviser to the President on Technology and Digital Economy, and Aminu Maida, the Executive Vice Chairman and CEO of the Nigerian Communications Commission, under the supervising Minister for the Nigerian Communications Commission, Dr. Bosun Tijani,” the source alleged.

“They are pushing for the deal.”

The sources’s allegation refers to the Nigerian government’s regulatory role in the IHS transaction.

The Federal Government had publicly announced that it would scrutinise the MTN-IHS transaction because of the strategic importance of telecommunications infrastructure.

The NCC subsequently granted approval-in-principle for MTN’s acquisition of the Nigerian IHS business, subject to conditions, while the FCCPC separately imposed the 30 percent local-investor sell-down requirement.

The Unidentified Nigerian Investors

The sources believe that this ownership structure should be investigated alongside the Mafab transaction.

The sources alleged that once MTN completes the relevant transactions and Nigerian interests emerge in the ownership structure, Tinubu would “by default” become a shareholder.

“Then now when MTN buys it, Tinubu by default becomes a shareholder,” the source said.

MTN’s Expanding Control

If both transactions proceed, MTN’s position in Nigeria’s telecommunications infrastructure and spectrum market would nevertheless expand considerably.

The Mafab transaction would potentially give MTN additional 3.5GHz and 2.1GHz spectrum.

The IHS acquisition would give MTN much greater control of tower infrastructure on which Nigerian telecom operators, including MTN’s competitors, depend.

The FCCPC’s 30 percent sell-down condition was specifically designed to address concerns arising from that concentration.

The combination of the two transactions therefore raises a broader question about who will own the Nigerian assets surrounding MTN’s expanding telecom infrastructure empire.

‘This Is The Final Step’

The telecom sources insist that the significance of the Mafab transaction goes beyond spectrum.

The sources also urged scrutiny of the circumstances surrounding Mafab’s original licence payment, its subsequent valuation and the proposed transfer to MTN.

The source’s central allegation is that what appears to be a series of separate corporate and regulatory transactions is actually part of a coordinated ownership strategy.

When SaharaReporters called MTN spokesperson Funso Aina, the calls went unanswered. He also had not responded to a text message seeking clarification on the deal at the time of publication. (SaharaReporters)