NCC Raises Reserve Bid Price for 5G Spectrum Auction from $194.7m to $273.6m

Having successfully auctioned the initial two slots in the 3.5GHz spectrum in December 2021, to MTN Communications Plc and Mafab Communications Limited beginning from a fixed reserve bid price of $194.7 million, the Nigerian Communications Commission (NCC) has raised the reserve bid price for the remaining two slots which it plans to auction in next month to $273.6 million.

However, stakeholders have kicked against the move.

The NCC yesterday announced the reserve bid price for the planned December auction while presenting the draft Information Memorandum (IM) to telecom operators at a stakeholders’ meeting organised in Lagos.

The second auction of the remaining two 3.5GHz spectrum slots were expected to facilitate 5G network rollout across the country and deepen broadband penetration.

Worried by the hike in the reserve bid price, a representative from Huawei Technologies expressed surprise that the NCC could raise the reserve bid price and called on the regulator to cut down the bid price to enable more operators participate in the bidding process.

In its submission at the stakeholders’ forum, Airtel, which took part in last year’s bid, but withdrew at the eleventh round when the process was at its peak, told the NCC yesterday, to consider its participation in last year’s bidding process and grant it the administrative privilege to buy one of the slots at the reserve bid price, without bidding with other operators.

MTN which is also interested in the next 3.5GHz spectrum auction told the NCC that it would be unfair if MTN was not allowed to bid for the next auction having paid premium to attain the 3.5GHz slot it currently has.

MTN, Mafab and Airtel had last year participated in the auction of the initial two slots of the 3.5GHz spectrum, and all three commenced bidding from a reserve bid price of $194.7 million, fixed by NCC, until they reached a winning bid price of $273.6 million.

Responding to stakeholders’ reactions, the Executive Commissioner, Technical Services at NCC, Mr. Ubale Maska, said the hike in the reserve bid price was justified because spectrum licence had appreciated after it was auctioned last year.

He also said it would only be fair to all operators, if Airtel would participate afresh in the next auction.

Head, Spectrum Administration Department at NCC, Abraham Oshadami, while presenting the draft IM to operators at the stakeholders’ meeting, said the NCC was desirous of auctioning the remaining two slots of 100 MHz TDD in the 3.5GHz band to support the delivery of ubiquitous broadband services in line with the Nigerian National Broadband Plan (NNBP) 2020-2025.

According to him, interested operators are to make a non-refundable Initial Bid Deposit (IBD) of 10 per cent of the reserve bid price.

“The licence is a 10 year licence and the launch of the commercial services by the winners, shall not be later than 12 months after the effective date of the licence,” Oshadami said.

In his welcome address, the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, said: “Following the successful auction of the initial two lots in December 2021, the Commission has received requests to administratively licence the available lots at the previous auction fee.

“However, the Commission, in line with its powers under the Nigerian Communications Act 2003, has decided to licence the available lots in the 3.5GHz band through the auction method, which is a transparent and efficient approach that can open up opportunities for new entrants as well as deepen competition in the industry.”

According to Danbatta, the Commission has committed enormous resources to ensure that harmonised Spectrum was secured and released in a timely manner for present and future rollout of services that will underpin the Fourth Industrial Revolution (4IR), including International Mobile Telecommunication (IMT-2020) services.

“We have kept ourselves abreast of developments at international fora, including ITU-R Study Groups to enable the allocation of strategic Spectrum to IMT services especially the IMT-2020, which has been on the front burner in the last two ITU-R Study Cycles.

“Hence, it is important that we ensure the timely release of the spectrum bands necessary for 5G deployment to the industry to enable us reap the immediate and envisaged benefits of 5G technology, and facilitate the development of Nigeria’s Digital Economy to foster national growth. NCC has developed a draft Information Memorandum (IM) for the auction of the 3.5GHz band which has been published on our website to enable stakeholders review and make inputs and comments.

“We are here today, to deliberate on the draft document and make contributions towards the management and utilisation of this resource in line with global best practices.

“The Commission will continue to develop policies and guidelines in conjunction with stakeholders to deliver better quality of experience for all,” Danbatta further said.