Nigerian Communications Commission (NCC) said it has set in motion modalities to auction the remaining 3.5 GHz spectrum for the deployment of 5G networks in the country, presenting yet another opportunity to Airtel, Glo and 9mobile to join the 5G race. The regulatory authority for the telecommunications industry in the country has published the draft information memorandum on the auction of the remaining 3.5 GHz spectrum. The information memorandum defines the process that the Commission will adopt for the licensing of the remaining 3.5 GHz spectrum. It also provides information on the Nigerian communications market, details of the spectrum on offer, the pre-qualification process, the auction process, and indicative timetable. Barring any last-minute amendments by the NCC, the action of the remaining 3.5 GHz spectrum for the deployment of 5G in the country will hold on 19 December 2022 at a yet-to-be-determined venue with a mock auction expected on 16 December 2022.
The auction closure will occur when the public announcement is made by the auction overseer/manager, revealing the provisional winners to be awarded the licences under the process, at which point each successful bidder will automatically be deemed to have been awarded a provisional licence. However, to stand a chance, Airtel, Glo, 9mobile and any other interested telecom firms are expected to pay a mandatory Intention-To-Bid Deposit (IBD)of $27,360,000.00 tentatively by 5 December 2022, which is also the tentative deadline for the submission of applications for the auction. According to the draft information memorandum, the NCC is offering the remaining lots of the 100MHz in the 3.5GHz spectrum band to support 5G deployment in Nigeria in order to ensure reliable communications services and innovative digital technologies in the country.
The Commission is offering the remaining two lots in the band ranging from 3400-3500 MHz and 3600-3700 MHz, totalling 200 MHz for auction. This will be awarded to winning bidders in 100MHz lot. The auction will be an Ascending Clock Auction. Each lot of 100 MHz TDD represents 1 eligibility point. This means that only two telecom firms stand a chance to succeed in the final outcome of the auction. While 3400-3500 MHz represents Lot A, 3600-3700 MHz represents Lot C and are available for auction. Lot B (3500-3600 MHz) had been won by MTN and Lot D (3700-3800 MHz) had been won by Mafab in 2021 with the Guard Band of 100 MHz in the range of 3800-3900 MHz not available for auction.
It will be recalled that NCC had in December 2021 conducted an auction of the first two lots of 100 MHz TDD in the 3.5 GHz band to deepen broadband penetration and support the delivery of ubiquitous broadband services in the country. Mafab and MTN scaled through. The reserve price, the minimum price for one lot of the remaining 100 MHz TDD, for a ten (10) year licence tenure, has been fixed by NCC at $273,600,000.00 or its equivalent in Naira at the prevailing Central Bank of Nigeria (CBN) rates at the time of the auction. However, the fee for the 5G spectrum licence will be determined at the auction. The opening bid will be an increment higher than the reserve price in the opening round of the auction. A successful bidder at the auction will be expected to pay a sum equal to the amount of the winning bid minus the IBD, as well as an operational licence fee, where applicable. The balance (winning bid amount less the IBD) of the auction fee shall be paid to the Commission on or before 20 January 2023. Inviting comments from the public and interested stakeholders, the Commission disclosed that it will hold a public consultation in respect of the draft information memorandum on 15 November 2022 in line with it’s participatory rule-making process for the communications sector. If a bidder is disqualified from the process, the Commission reserves the right to impose a penalty. The maximum penalty may result in forfeiture of the full IBD paid and the bidder may be barred from future auctions.
