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.

“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.

“It may feel as if everything has gone online, but 90% of purchases still happen in person” – Stripe. That is from Stripe, one of the world’s largest payment companies, valued at least $70 billion.

Add this – “According to research done by The Fletcher School and Mastercard, of the $301 billion of funds flow from consumers to businesses in Nigeria, 98 percent is still based on cash”  – and you get the clear picture that money is still in the meatspace and not yet in the cyberspace. Yet, while we are transiting into the digital space, you cannot ignore where the money is at the moment.

Indeed, as you march to the online world, never forget that we all live in the physical world. Have an offline strategy!

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Comment: Subjective data. Apart from trust and security concerns, few people use stripe and PayPal even in USA. Greater number of payments go through direct bank transfers. Aliexpress, Walmart, Amazon, Flipkart and EBay sales report would be objective and reliable.

My Response: What is subjective in their data? Just curious why you began with that generalization. On “Aliexpress, Walmart, Amazon, Flipkart and EBay sales report would be objective and reliable,” what do you mean by that line on the topic of paying in person and online? In eBay and Amazon, there is no option to pay in person while in Walmart, most have to go to the stores to pay. How do those companies provide objectivity and reliability on Stripe data?

Further comment: prof. Amazon has different payment options for different locations, in many places they do allow pay in person. Besides, Amazon and other big market places have their own payment wallets linked directly to local banks why would they use stripe? EBay works more as an auction marketplace than conventional ecommerce, so the payment method is a kind of escrow for trust and fast fulfilment.

Stripe and Paypal are just few among many payment processing companies for online merchants and sellers.

Due to cash freeze and other stringent measures very few people use them. People use other payment options like payoneer, payza etc.. So stripe can’t authoritatively make such presumptive claim based on an experience in a particular geolocation. What could be more subjective than that.

It would be more objective when customers data from various ecommerce marketplaces, banks and other cash processing companies are taken into cognizance.

My Response: Amazon uses Stripe to process payment. Ebay uses Paypal. Walmart uses Stripe. These payments have POS which means Stripe collects offline payments. In that email, Stripe is asking me to accept its POS and NFC system so that we can collect in-person payment in my company in the US. 

I do not understand your comparison. That you pay in Amazon or eBay with a card does not mean they process payments. Stripe processed over $640 billion in 2021. Some of those for Walmart and Amazon. Paypal does more than a trillion dollars. 

You cannot say that a company which processes $640 billion in the largest economy in the world is speculating.

One of the most magical experiences in America is how you can join their systems and through institutions they have developed, over time, you will begin to see dramatic improvements in whatever that you are doing. You get in as a PhD student, largely knowing not much, but 4-5 years, you become a thought-leader and an expert with new ideas in that domain. Take it or leave it, across many domains, anybody can be anything because the institutions already established ensure that many management and operating  risks are eliminated.

Nigerians hailed when we had A-stars of the Obasanjo era. The question remains: if they departed and things suddenly returned to the old state, what is the end-point then? Take the issuance of international passports. They were so effective that you could take the photo and get the passport on the same day. But that extremely efficient system has gone.

Why? What happened to the system within the immigration service ? Why did someone disband a great process? So, if we can take forward 10 steps and suddenly move back 12 steps, what should be the strategy, going forward? I visited a university in Nigeria. I was told that only a center run by the wife of the VC could coordinate external  events. If you have a conference, the center must be paid to coordinate and manage it. But that was not the way it used to be. So, what happened to the old process?

It does seem like the next Nigerian president must think deeper on how we can build resilient institutions instead of thinking that humans can do magic? Otherwise, you can do the magic and a few years ahead, things will fall back to level zero.

Indeed, we need a leader who can build sustainable institutions in the nation. Through that playbook, we can keep improving, step by step, on our processes. Today, we have mainly human-centric elements and the systems are vulnerable as great A-stars can “hide” poor processes, but over time, things will blow up, revealing internal defects. Yes, we do not need to have super-humans to thrive. We need resilient institutions which common people like us can run.  The next president must have that memo.

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Comment 1: Yes, we need institutions in Nigeria not strong men as Barack Obama once told a gathering of African leaders but our current crop of politicians do not understand that, they try to build selfish structures that serve very narrow interests. They only realise too late in the day when they have left the system and a new emperor have been crowned. We do not have a fit for purpose civil service but the civil servants are always on the watch out if the new sheriff wants to change things, if not they will “show you the way” we need not only a president with the will and intention but also legislators and higher cadre civil servants who want professionalism to reign.