MTN Nigeria, which clinched one of the two spectrum licensees auctioned on December 13, 2021, last year may take part in the second round of the 5G spectrum license auction set for December 19, 2022.
It was unclear yesterday if Mafab Communications, which got the other slot in the first auction, where the two paid $273million each, will participate in the new round. While MTN has rollout 5G services in parts of the country, Mafab was yet to begin services.
There is an indication that Airtel dropped out of the first auction when the bid price exceeded $270milloion, claiming it could not afford to sacrifice more than $270 million for a futuristic 5G service still in its infancy, may participate again in the new auction.
While MTN is requesting that the NCC opens the oncoming auction exercise to any company who wants to bid, including previous winners, Airtel is protesting the MTN request arguing that such a grant would be unfair to the market.
MTN has a record of taking the bull by the horn when investing in the Nigerian telecom market, which it reckons has good yield potential.
In 2001 during the Digital Mobile License that ushered in the GSM revolution, MTN’s confidence in the green Nigerian telecom market helped push the license fee price to $285 million.
Airtel had earlier asked if NCC would grant it some concessions since its participation made the price of the first auction reach the level it got to. MTN’s regulatory affairs general manager, Mr Ikenna Ikeme, had argued that no one should be barred from taking part in the oncoming auction because of their previous participation.
In response to a question, NCC’s Executive Commissioner, Technical Services, Engineer U Maska, had said it was not unusual for a company that had won a license in a previous 5G spectrum auction to seek participation in a subsequent one.
He said there had precedence of such practice in Germany, Finland and the United States. He noted, however, that whatever decision the NCC will take on who participates would suit the Nigerian environment. Maska said while the Airtel fears were understandable, the MTN request was not abnormal.
The regulator would determine who participates in the scheduled December 19 auction in a final IM issued two days before the auction.
The Nigerian Communications Commission (NCC0 held stakeholders’ engagement on the draft information memorandum (IM) on the auction of two additional slots of 100MHz in the 3.5 GHz band. forum today.
The NCC had fixed $273.6 million, the amount paid by the last two winners, as the reserved price. The NCC IM had explained that “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 two slots of 100 MHz TDD Spectrum in the 3.5 GHz on offer range from 3400 – 3500 MHz and 3600 – 3700 MHz, totalling 200 MHz for auction.
When NCC held the first auction last year, the winners paid $273.6 million each for their 5G spectrum licence. At the time, the reserve price was $197.4m.
Meanwhile, in an opening speech at the meeting today, Professor Umar Danbatta, executive vice-chairman of the Nigerian communications commission (NCC) says the commission will ensure timely deployment of the second spectrum bands for 5G.
The EVC said the engagement aligned with the strategic vision to promote fair competition and inclusive growth and increase investment and innovative services.
“Following the successful auction of the initial two (2) lots in December 2021, the commission has received administrative requests to licence the available lots at the previous auction fee,” he said.
“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.
“The commission has committed enormous resources to ensure that harmonised spectrum is secured and released promptly for present and future rollout of services that will underpin the Fourth Industrial Revolution (4IR), including International Mobile Telecommunication (IMT-2020) services.
“Hence, it is important that we ensure the timely release of the spectrum bands necessary for 5G deployment to the industry to enable us to reap the immediate and envisaged benefits of 5G technology and facilitate the development of Nigeria’s digital economy to foster national growth.”
Speaking further, Danbatta said the auction is not to make money for the federal government, adding that revenue generation is not a determinant.
“We are not in any way raising revenue for the federal government. The last auction price dictates the revenue to be generated. We also did not raise the amount used for auction prices,” he added.
