NCC, Telcos Differ on N75bn Reserve Price for 3.5GHz Spectrum

*Fixes December 13 for auction

Emma Okonji

Ahead of preparations for 5G rollout in Nigeria in 2022, the Nigerian Communications Commission (NCC) has released draft Information Memorandum (IM) for 3.5GHz spectrum auction that would facilitate 5G rollout across the country.

The NCC had fixed December 13, 2021, for the 3.5GHz spectrum auction and had pegged the reserve price at $197.4 million (N75 billion).
But telecoms operators, including GSM Association (GSMA), have disagreed with the reserve price, and have called for a downward review to enable more operators participate in the 3.5GHz auction process.

The NCC at a stakeholders’ consultative forum, held in Lagos yesterday, presented the dissenting positions of the operators and the GSMA, which they had earlier submitted to the commission.

The stakeholders’ consultative forum, which was organised by the NCC further discussed the reserve price, among other issues such as longevity of the spectrum licence, the auction process, the requirements and rollout obligations.

While the NCC was considering 10 years period for the duration of the spectrum, the operators want the NCC to extend it to 20 years, to enable winners of the spectrum to have enough rollout time to utilise the spectrum in offering telecoms services to subscribers.
Reacting to the N75 billion reserve price, telecoms operators, which included MTN, Airtel, Huawei, Intelsat, including the GSMA, called on NCC, to consider the current exchange rate in pegging the reserve price.

They argued that if the reserve price remained high, it would discourage operators from participating in the auction process.
The Director, Spectrum Administration at NCC, Oluwatoyin Asaju, who presented the draft IM for the 3.5GHz spectrum auction at the stakeholders’ consultative forum said: “The IM provides guidance and process that the commission has decided to adopt for the licensing of the 3.5 GHz band, including details of the spectrum to be made available, the pre-qualification process and the auction process.”

According to him, the 3.5GHz spectrum would come in five lots of 100 MHz each, to be cleared at different periods depending on the level of encumbrances on the slots.
He, however, said for the purpose of the auction, only two lots of 100 MHz each would be offered in the first phase of the auction, while the remaining three lots would be auctioned some other time.

For the auction process, Asaju explained that it would be Ascending Clock Auction (ACA), while the auction would be software based.
He said provisions had been made for manual auction should the auction software fail during the auction process, adding that there would be a mock auction that would precede the main auction on December 13.

“A reserve price of approximately N75 billion, equivalent to $197,400,000.00, will to be used. An Initial Bid Deposit (IBD) equal to 10 per cent of the reserve price is adopted in line with the previous auction.

“New entrants are allowed to participate in the auction in addition to existing licensees and only licensees with 100 per cent regulatory compliance will be allowed to participate in the auction.
“The auction comes with a 10-year spectrum licence and a minimum requirement of a UASL Operational Licence. New entrants or licensees without a UASL will be required to additionally obtain a UASL Operational Licence,” Asaju said.

For the rollout obligations, he said operators would in the first two years, starting from the effective date of the licence, roll out service in at least one state in each geo-political zone, including federal capital territory, and in additional six states after the five years.
The Minister of Communications and Digital Economy, Dr. Isa Ibrahim Pantami, in his keynote address, said the planned 3.5GHz spectrum auction was another milestone in the desire of the federal government to roll out 5G network in the country as quickly as possible.

Pantami who was represented by a director in the ministry, Mr. Abubakar Abdullahi Ladan, said: “The 3.5GHz spectrum band (the lower C-band), which is not effective in satellite operations, has been recovered from NIGCOMSAT and reallocated to the NCC in the first instance, for deployment of 5G technology based on terms and conditions agreed by both parties.
“The next step is auctioning of the spectrum which is under the purview of the regulator of the industry. However, for transparency and accountability in the sale of this common national heritage, the federal government thought it wise to involve relevant stakeholders in the process so that the general public is carried along.

“The purpose of this gathering therefore, is to discuss the Information Memorandum on the Auction of this 3.5GHz Spectrum Band allocated for deployment of 5G network in Nigeria.”
The Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, in his speech, said: “5G technology does not only offer enhanced broadband and ultra-reliable low/latency communications, it also provides massive machine type communications, where lots of devices will seamlessly connect and interact independently with the Internet without human intervention.

“Given the importance of 5G technology and the critical role of spectrum, the International Telecommunications Union Radio Communication Sector (ITU-R) conducted studies in its last two study cycles during the World Radio Communication Conferences of 2015 and 2019 (WRC-15 & WRC-19) and identified spectrum for 5G technology including the 3.5GHz band, which stands out due to its excellent propagation characteristics which offer both capacity and coverage.”