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FG targets $547 million from remaining 5G spectrum auction

By Adeyemi Adepetun
25 October 2022   |   4:08 am
The coffers of the Federal Government is expected to be $547 million richer following plans by the Nigerian Communications Commission (NCC) to auction two more Fifth-Generation (5G) network licences in the country.

[FILES] Ultra-speedy 5G networks. — Bloomberg

The coffers of the Federal Government is expected to be $547 million richer following plans by the Nigerian Communications Commission (NCC) to auction two more Fifth-Generation (5G) network licences in the country.

In the Information Memorandum (IM) on 3.5 GHz Spectrum Auction revealed at the weekend, which NCC used to announce the planned auction, the commission set the reserve price for the new 5G spectrums at $273.60 million. NCC, in the IM, said it would issue two more 5G licences to operators in Nigeria.

In the 64-page IM, NCC revealed that “The reserve price is the minimum price for one Lot of 100MHz TDD for a 10-year licence tenure fixed at $273.60 million or its equivalent in Naira at the prevailing Central Bank of Nigeria rates at the time of the auction.”

According to the NCC, it is offering the remaining lots of 2 x 100MHz in the 3.5GHz spectrum band to support 5G deployment in the nation. It disclosed this in its ‘Information Memorandum on 3.5 GHz Spectrum Auction.’

The remaining two Lots of 100 MHz TDD Spectrum in the 3.5 GHz band ranging from 3400 – 3500 MHz and 3600 – 3700 MHz, totalling 200 MHz for auction, according to NCC, will be awarded to winning bidders in the 100 MHz Lot.

Recall that on December 13, 2021, the first 3.5GHz spectrum auction, which was held in Abuja, by NCC produced both MTN Nigeria and Mafab Communications.

They coughed out $273.6 million each by February 24, 2022.

While MTN has enabled Nigeria to join South Africa and Kenya as the third country to have deployed 5G in Africa by August, NCC has given Mafab an extension till January 2023 to begin its rollout of 5G service in Nigeria.

With MTN’s launch, some 81 clusters in Lagos have been live on 5G, while some areas in six other cities including Abuja, Port Harcourt, Ibadan, Kano, Owerri, and Maiduguri would follow soonest.

Industry analysts are of the opinion that the new auction could pave the way for Airtel, Globacom, 9mobile and other players, including those in the Tier 2 segment of the market with the financial war-chest to compete and get the license.

MEANWHILE, in the new IM, the NCC said it will hold a public consultation regarding the draft IM on November 15, 2022.

“This is in line with the Commission’s participatory rule-making process for the communications sector, to give stakeholders and interested parties an opportunity to review and comment on the draft IM before the final document is published.”

The commission added that applicants for the spectrum do not have to be licensed network operators in the nation but will need a Unified Access Service Licence if their bid is successful.

In the IM, NCC said the application date for the license would start November 21, bidders to be notified on December 9; mock auction will be December 16, while auction proper holds December 19. By December 21, NCC would publicise and notify provisional winners. Winners would be expected to make payment for the spectrum by January 20, 2023.

NCC stressed that the launch of commercial services shall be not later than 12 months after the effective date of the licence, adding that the successful bidder shall be assigned the 3.5 GHz Frequency licence and the UASL where applicable and shall roll out services.

Between year one to two, the IM said, starting from the effective date of the licence, there should be rollout of service in at least two states in each geo-political zone of the country: South-West (SW), South-South (SS), South-East (SE), North-Central (NC) including FCT, North-West (NW) and North-East (NE).

By year three to five, operators must extend 5G services to additional six states other than those in year one to two, across the six geo-political zones. By year six to 10, operators are encouraged to roll out across all other States.

“Service in each state would mean a minimum of five sites in a state. Minimum speed of 100 Mbps Down Link (DL) using applicable test measurement tools,” NCC stated.

However, the commission said in the event of the successful licensee’s inability to deploy services as specified herein, it (NCC) reserves the right to sanction the licensee based on relevant sections of existing regulations except for areas where Force Majeure is established.

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