The Nigerian Communications Commission (NCC) has fixed the reserve price for its new 5G spectrums at $273.60 million.
The NCC, in a memorandum titled ‘Information Memorandum on 3.5 GHz Spectrum Auction’, said it will auction two 100MHz in the 3.5GHz Spectrum Band, for a 10-year license tenure.
“The Reserve Price (RP) is the minimum price for one Lot of 100MHz TDD for a ten (10) year license tenure fixed at Two Hundred and Seventy-Three Million and Six Hundred Thousand United States Dollars only (US$273,600,000.00) or its equivalent in Naira at the prevailing Central Bank of Nigeria (CBN) rates at the time of the auction.
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“The fee for the ten (10) year Spectrum License 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 License fee (where applicable),” the Commission stated.
The 5G spectrum licensing kicked off in May with only two successful bidders. The NCC added that a draft Information Memorandum (IM) has been developed to support the attainment of its objective through an auction process.
“The commission will hold a Public Consultation in respect of 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,” it said.
Though the NCC explained that applicants do not have to be licensed network operators in Nigeria but will need a unified access service license (UASL) if their bid is successful, there is concern that finding a bidder will be difficult for the Commission.
In May, the Commission issued final letters of award of 5G licenses to MTN Nigeria and Mafab Communications Limited after they successfully secured the auction with $273.6 million each. MTN in August rolled out its 5G mobile network but Mafab missed the rollout date and got a five-month extension from the NCC.
The NCC had selected three companies, including Airtel late last year, as finalists in the 5G auction. However, Airtel failed to secure the license, leaving only MTN and Mafab as the licensees.
It thus casts doubt that there are still financially capable bidders left — unless the Commission is counting only firms outside the telecom industry.