Following plans by the Nigerian Communications Commission (NCC) to sell off two more Fifth-Generation (5G) network licences in the nation, the Federal Government’s coffers are anticipated to be $547 million richer.
The commission set the reserve price for the new 5G spectrums at $273.60 million in the Information Memorandum (IM) on 3.5 GHz Spectrum Auction that was made public over the weekend and used by the NCC to announce the scheduled auction. In the IM, NCC announced that it would grant two more 5G licenses to Nigerian carriers.
NCC disclosed in the 64-page IM 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.”
The NCC claims that it is providing the last 2 x 100MHz lots in the 3.5GHz spectrum band in order to assist the nationwide implementation of 5G. In its “Information Memorandum on 3.5 GHz Spectrum Auction,” it made this disclosure.
The winning bidders in the 100 MHz Lot will receive the remaining two Lots of 100 MHz TDD Spectrum in the 3.5 GHz band, which are available for auction and total 200 MHz total between 3400 and 3500 MHz and 3600 and 3700 MHz, according to NCC.
Recall that the NCC’s first 3.5GHz spectrum auction, held in Abuja on December 13, 2021, resulted in the creation of MTN Nigeria and Mafab Communications.
By February 24, 2022, they had each paid out $273.6 million.
While MTN made it possible for Nigeria to install 5G by August, joining South Africa and Kenya as the third African nation to do so, NCC has granted Mafab until January 2023 to start rolling out the service in Nigeria.
Since MTN’s introduction, 81 clusters in Lagos have 5G service available, and soon some places in Abuja, Port Harcourt, Ibadan, Kano, Owerri, and Maiduguri will as well.
According to industry observers, the new auction may open the door for businesses like Airtel, Globacom, 9mobile, and others, including those in the Tier 2 market sector with the financial resources to compete and win the license.
The NCC announced in the new IM that a public consultation on the draft IM will take place 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 said that candidates for the spectrum do not need to be federally authorized network operators, but if their bid is accepted, they will require a Unified Access Service Licence.
The mock auction will take place on December 16 and the actual auction will take place on December 19, the NCC stated in the IM. Applications for the license will open on November 21. Bidders will be notified on December 9. Provisional winners would be announced and contacted by NCC by December 21. By January 20, 2023, the prizewinners must pay for the spectrum.
The NCC emphasized that the launch of commercial services must occur no later than 12 months following the license’s effective date, and it also stated that the winning bidder must be given the 3.5 GHz Frequency license and, if applicable, the UASL before rolling out services.
According to the IM, service rollout should occur in at least two states in each of the following geopolitical zones between years one and two, beginning from the date the licence became effective: South-West (SW), South-South (SS), South-East (SE), North-Central (NC), including FCT, North-West (NW), and North-East (NE).
Operators must offer 5G services in six additional states across the six geopolitical zones by years three to five in addition to those in years one to two.
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 stated that it (NCC) reserves the authority to discipline the licensee based on pertinent portions of current regulations, with the exception of regions where Force Majeure is established, in the event that the successful licensee is unable to deploy services as indicated above.