The Nigerian Communications Commission (NCC) has declared its readiness for the official auctioning of the 3.5 Gigahertz (3.5 GHz) spectrum for the deployment of Fifth Generation (5G) technology in Nigeria on December 13, 2021.
A statement signed by the Director of Public Affairs, Dr. Ikechukwu Adinde, said the Commission is adopting Ascending Clock Auction format, which is software-based, while a mock auction has been slated for December 10, 2021, as a precursor to the actual auction on December 13, 2021.
It said the Information Memorandum (IM) recently presented to the Commission at a stakeholder engagement forum provides information, conditions, obligations, financial implication, timelines and other necessary details on the planned 3.5Ghz spectrum auction.
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‘‘The IM also explains the rollout obligations of the would-be eventual winners of the spectrum license auction, whose reserved price has been pegged at $197.4 million (N75 billion).
‘‘The IM also states that only licensees, who make down payment of 10 per cent of the reserved bid price and with 100 per cent regulatory compliance would be allowed to participate in the auction while licensees with outstanding debts that have secured NCC’s approval for a payment plan will be allowed to participate in the auction.’’
According to the IM, the auction comes with a 10-year spectrum license and a minimum requirement of an operational Universal Access Service Licence (UASL). However, new entrants or licensees without a UASL will be required to obtain a UASL operational license to be qualified for the 5G license.
The eventual licensees will have a rollout obligation plan spanning a period of 10 years, beginning from the date of award of the license. Between the first and second year of the license, the operators are expected to rollout service in, at least, one state in each geo-political zone.
From the third to fifth year, they are obligated to cover all the zones. Between six to 10 years, they should cover all the states in the country, according to guidelines set out in the IM.
Speaking on the planned roll out, Minister of Communications and Digital Economy, Prof. Isa Ali Ibrahim Pantami, said the Ministry has been working closely with the Commission to ensure that necessary spectrum resources needed for the deployment of 5G network in Nigeria to accelerate the nation’s digital economy space is made available.
The Minister said the 3.5GHz is the most popular spectrum band used globally by regulators and operators for the deployment of 5G technology, and it seems the only band available in Nigeria for immediate use by operators.
On his part, the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, listed the various steps diligently taken by the Commission that culminated in present status of the 5G deployment plan.
He also highlighted the potential benefits from investment in 5G deployment to potential operators and investors in the country.
According to him, “Nigeria has an estimated population of 214 million, with an average growth rate of 2.6% annually. Approximately 76.46 per cent of the population is under the age of 35. In line with these demographic changes, internet penetration grew from 3 per cent in 2004 to 73.82 per cent as at September, 2021, and broadband penetration increased from less than 10 per cent in 2015 to 40.01 per cent in September, 2021.”
With the increase in mobile usage brought about by Fourth Generation (4G) technology and network performance, he said that 5G technology will leverage on this momentum, bringing substantial network improvements, including higher connection speed, mobility and capacity, as well as low-latency capabilities.
But the Association of Licensed Telecoms Operators of Nigeria (ALTON), and GSM Association (GSMA), have disagreed with the reserve price, and thus called for a downward review to enable more operators participate in the 3.5GHz auction process.
Following a meeting held by the operators in Lagos on Friday, they are asking the NCC to extend the period to 20 years, to enable winners of the spectrum to have enough rollout time to utilize the spectrum in offering telecoms services to subscribers.
They also asked the Commission to reconsider the N75 billion reserve price. The operators, which included MTN, Airtel, Huawei, Intelsat, said the current exchange rate in pegging the reserve price should be considered, arguing that it would spook operators who would want to participate in the auction process.