The Nigerian Communications Commission (NCC) has put up another two slots of spectrum in the 3.5GHz Spectrum band for auction before end of 2022, to boost deployment of Fifth Generation (5G) services in Nigeria.
The process, which was made public on 21st October 2022 with the publication of the Draft Information Memorandum (IM) for the auction on the Commission’s website, invited stakeholders to study the Memorandum for purposes of making submissions ahead of a review of the IM on 15th November 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.
This planned auction is a follow-up to the first one conducted by the Commission held at the Transcorp Hilton Hotel, Abuja on Monday, December 13, 2021 wherein Mafab Communications Ltd and MTN Nigeria Plc emerged successful winners of the 3.5GHz spectrum auction for the deployment of 5G technology to support the delivery of ubiquitous broadband services in Nigeria.
According to the ‘Information Memorandum on 3.5 GHz Spectrum Auction’ published by the Commission, applications for bids opens 21st November 2022. The closing date for the submission of application, the deadline for payment of mandatory Intention-To-Bid Deposit (IBD), and the Pre-Qualification Stage is set for 5th December 2022.
Qualified bidders would be notified on 5th December 2022 while notification and publication of the Mock Auction and Auction date will occur on the same day. The Mock Action is billed for 16th December 2022 just as the Auction proper takes place three days later, on 19th December 2022.
The process is anticipated to enter its grant stage on 21st December 2022 with the publication of provisional bid winners and the notification of provisional award of licence.
The Commission said year 2023 will open with the payment for Spectrum Licence and Operational Licence, where applicable, on 20th January 2023 and on the 23rd of January 2023, the auction process will be concluded with the publication of the result.
The NCC said pursuant to the issuance of the IM, it reserves the right to make available additional information through the publication of further documentation. Therefore, interested parties have been advised to stay abreast with developments in the licensing process by checking regularly for updates on the Commission’s website.
According to the Commission has set the reserve price at $273.60 million bid price for each spectrum licence on offer. This will translate to a total of $547.2 million. The offering includes the remaining lots of 2 x 100 megahertz (MHz) in the 3.5 GHz spectrum band to support 5G deployment in Nigeria.
“The spectrum reserve price (RP) is the minimum price for one slot of 100MHz TDD for a 10-year licence tenure fixed at $273,600,000.00 or its equivalent in Naira at the prevailing Central Bank of Nigeria (CBN) rates at the time of the auction, according to the memorandum.
The Commission said it had developed a draft information memorandum (IM) to support the attainment of this objective through an auction process.
“The commission will hold a Public Consultation in respect of the draft information memorandum (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,” the memorandum further said.
The commission added that applicants for the spectrum do not have to be licensed network operators in the country but will need a unified access service licence (UASL) if their bid is successful.
Need for additional spectrum
Already, there are operators providing access to the Internet in one form or the other in Nigeria. Broadband delivery is largely via Mobile connections. However, there is a need for higher speed connections for data–intensive services required by modern communications devices to serve Nigerian population (of more than 70 per cent below the age of 35).
Some Licensees providing broadband access include: Mobile Network Operators (MNOs); Fibre to the Home Operators; Others including but not limited to, and Fixed Wireless Access Operators.
To address the gap, the executive vice chairman, NCC, Prof Umar Garba Danbatta said additional 3.5GHz spectrum bands on offer will support 5G deployment in Nigeria to ensure reliable communications services and innovative digital technologies.
The proposed deployment is in line with the National Digital Economy Policy and Strategy (NDEPS) 2020 – 2030, National Policy on Fifth Generation (5G) Networks for Nigeria’s Digital Economy and in fulfilment of one of the key initiatives of the Nigerian National Broadband Plan 2020 – 2025 (NNBP).
In its drive to deepen broadband penetration in the country, the Commission in December 2021, conducted an auction of two (2) lots of 100 MHz TDD in the 3.5 GHz band to support the delivery of ubiquitous broadband services. The Commission is now desirous of auctioning the remaining two (2) lots of 100 MHz TDD in the 3.5 GHz band to support the delivery of ubiquitous broadband services in line with the NNBP 2020-2025.
This IM defines the process that the Commission will adopt for the licensing of the remaining two (2) lots of 100 MHz TDD each in the 3.5 GHz band. It provides information on the Nigerian communications market, details of the Spectrum on offer, the prequalification process, the Auction process, and indicative timetable.
The Reserve Price
The Commission is offering the remaining 2 Lots of 100 MHz TDD Spectrum in the 3.5 GHz band ranging from 3400 – 3500 MHz and 3600 – 3700 MHz, totalling 200 MHz for auction. This will be awarded to winning Bidders in 100 MHz Lot.
The Reserve Price (RP) is the minimum price for one Lot of 100MHz TDD for a ten (10) year licence 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 Auction Process
The Commission has determined that licensing through Auction is a fair, transparent and efficient means of assigning the Spectrum. The Auction will take place in the city of Abuja in the Federal Republic of Nigeria at a location to be specified by the Commission. The auction will be an Ascending Clock Auction with Exit Bids as described in Section 5.11.
On completion of the Auction, each Successful Bidder will be deemed to have been awarded a provisional licence and will be required to pay the balance (Winning Bid Amount Less the IBD) of the Spectrum licence fees due to the Commission on or before 20 January 2023.
5G Opportunities Benefits for Nigeria
Industry players said the growth of the Nigerian communications sector, since liberalization, makes this Auction a unique investment opportunity. Growth in the sector has been spectacular with mobile penetration increasing from less than 1% in 2001 to 108.15% as at June 2022. In addition, Internet penetration grew from 3% in 2004 to 79.04% (151,021,062) as at June, 2022.
Chief Technology Officer, MTN, Muhammed Rufai which has launched its 5G network in select cities said “5G is much more efficient than all the previous technologies such as 2G, 3G and 4G. With 5G spectrum is more efficient. It allows data, enables 10 times the speed we have on our 4G network. 5G offers about 10 times less latency than 4G.
“And the third important factor is connection density, which is how many people are you able to connect within an area. 5G because it has large spectrum and also significantly improved antenna technology with things like massive MIMO and beam forming, we are able to connect many more people in the same area than the 4G network which is almost 100 times more connection density, and this is because 5G also targets what we called IoT Internet of Things.
“Going forward, we not only expecting people get connected through their phones, but also through so many sensors. So many things that will be connected to the 5G network for that to be transformed. With low latency and high throughput, a lot of use cases, a lot of connectivity requirements are not possible on the 3G and 4G networks but are now possible on 5G network,”, Rufai added.
5G will bring about 10 times user experience throughput, 10 times connection density, 10 times decrease in latency, three times spectrum efficiency, 100 times traffic capacity and 100 times network efficiency. In addition to the bandwidth increase for seamless video streaming or the next social application playground, 5G technology supports real-time, ultra-reliable communication between massive numbers of devices.
