Again, Controversy Trails 3.5GHz Spectrum Auction, 5G Rollout

INFOTECH

Less than a month to the planned auction of the 3.5GHz Spectrum by the Nigerian Communications Commission and the rollout of the 5G network, controversies over pricing and the timeline for the processes are already causing ripples among stakeholders in the Nigerian telecoms sector, reports Emma Okonji

The desire of the Nigerian Communications Commission (NCC), the telecoms industry regulator, is to deepen broadband penetration and encourage fair competition in the rollout of 5G services across Nigeria.

However, there are fears that this goal may be truncated unless the regulatory authorities can process a gale of complaints trailing the planned rollout of the 5G network as well as the auction of the 3.5GHz spectrum band for 5G deployment.

It all started with the exhumation of the claim by some Nigerians that the electromagnetic emission from 5G mast could cause health hazards like cancer and skin burn. 

After several sensitisation workshops carried out by the NCC, which confirmed the harmless nature of the 5G electromagnetic emission on humans, NCC decided to approve telecom operators to carry out a trial test on 5G deployment, which they successfully did last year.

NCC, in December last year, auctioned the initial two slots in the 3.5GHz spectrum to MTN Nigeria Communications Plc and Mafab Communications Limited, a development that led to the commercial launch of the 5G network in Nigeria by MTN Nigeria.

Following the successful auction of the 5G spectrum in December last year, and the successful commercial rollout of the 5G network this year by MTN Nigeria, NCC decided to auction additional two lots in the 3.5GHz spectrum, to further drive broadband penetration and 5G rollout in Nigeria and has fixed December 19, 2022, for the next round of auction, but a group, known as Network for Best Practice and Integrity in Leadership (NEBPRIL), has petitioned President Muhammadu Buhari and the National Assembly on the NCC should be prevailed upon to stop the planned spectrum auction.   

 The Controversy 

 The Chairman of NEBPRIL, Honourable Victor Ogene insisted the auctioning of another spectrum for the 5G rollout must stop. He argued that engaging in such an end-of-tenure bonanza in a critical sector such as telecommunications, at a time that the nation was toiling to chart new pathways in non-oil revenue, was self-serving, dubious, unethical and a brazen act of economic sabotage.

NEBPRIL, in a statement, said it had it on good authority that some powerful interests in the corridors of power are currently arm-twisting officials of the NCC to auction two additional lots of the 3.5 GHz spectrum on 5G services barely eight months after the first auction produced two investor-companies at $275 million each.

It said the government should rather encourage more competition in the telecommunications industry by urging the NCC to introduce and licence additional Mobile Virtual Network Operation (MVNO) services, which has the potential of stimulating increased activity in the sector, especially given its potential in creating more employment opportunities and wealth in the nation.

“We, therefore, call on President Buhari and the leadership of the two chambers of the National Assembly, to urgently take steps to put a stop to this obvious attempt at official malfeasance in the telecommunications sector, to save the nation from further self-serving, national economic harm being orchestrated by some unscrupulous individuals in the corridors of power,” Ogene said.

 NCC’s Desire 

To further drive its intention to auction the additional two slots in the 3.5GHZ spectrum for 5G rollout, NCC last week, held a stakeholders’ consultative forum in Lagos, where it presented the draft Information Memorandum about the auction, to stakeholders, for their input.      

Addressing the stakeholders in his opening remarks, the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, said: “As a world-class communications regulatory agency, we believe that our actions must be guided by decisions that take into cognisance the input from stakeholders in the industry. Therefore, we seek your active participation in these deliberations towards the licensing of the available two lots in the 3.5GHz mid-band spectrum for the rollout of 5G services in Nigeria. 

“Arising from the significant increase in broadband penetration in Nigeria, it has become vital for us to move to the next phase of global development of the sector, given the opportunities that abound for all stakeholders in the industry and the economy at large.”

Danbatta further said the commission intends to further deepen broadband penetration and encourage fair competition in the rollout of 5G services in Nigeria by auctioning the available lots in the 3.5GHz spectrum band.

 Hike in Spectrum Price 

 During the presentation of the draft IM, the Head of the Spectrum Administration Department at NCC, Abraham Oshadami announced the reserve bid price for the auction as contained in the draft IM, which NCC pegged at $273.6 million, high above the $194.7 million reserve bid price for the same spectrum band that was auctioned in 2021, a development that elicited reactions from operators who kicked against the hike.  

Worried about the hike in the reserve bid price, a representative from Huawei Technologies, expressed surprise that NCC could raise the reserve bid price from $194.7 million in 2021 to $273.6 million in 2022, and called on NCC to cut down on the bid price, to enable more operators to participate in the bidding process. 

In its submission at the stakeholders’ forum, Airtel, which took part in last year’s bid, but withdrew at the eleventh round, when the bidding process was at its peak, told the NCC to consider its participation in last year’s bidding process and grant it the administrative privilege to buy one of the lots at the reserve bid price, without bidding with other operators.

MTN, which is also interested in the next 3.5GHz spectrum auction, told NCC that it would be unfair if it is not allowed to bid for the next auction, having paid a premium to attain the 3.5GHz lot it currently has.   

MTN, Mafab and Airtel, had last year, participated in the auction of the initial two lots in the 3.5GHz spectrum, and all three commenced bidding from a reserve bid price of $194.7 million, fixed by NCC until they reached a winning bid price of $273.6 million. 

Responding to stakeholders’ reactions, the Executive Commissioner of Technical Services at NCC, Mr. Ubale Maska, said the hike in the reserve bid price was justified because the spectrum licence has appreciated after it was auctioned last year. According to him, the market price for the lot on offer has been determined by the last auction. He also said it would only be fair to all operators if Airtel would participate afresh in the next auction.  

MTN’s Position on 5G Spectrum 

 Disregarding the perceived fears envisaged by the telecoms industry regulator and the industry stakeholders that MTN Nigeria may dominate the 5G space and create a market monopoly for itself, if allowed to participate in the next 3.5GHz spectrum auction that is coming up on December 19, 2022, the telecom operator has said it will participate to clinch another 3.5GHz spectrum licence that will enable it to expand its operations and 5G network rollout. 

Speaking at a stakeholders’ forum, the General Manager, Regulatory Affairs and Corporate Relations at MTN, Mr. Ikenna Ikeme, said the Information Memorandum (IM) restricts operators who participated and won in the 2021 auction of spectrum in the 3.5GHz spectrum band from participating in future licensing processes. He however insisted that such winning bidder can also participate in the spectrum licensing processes, including the proposed auction of additional spectrum in the 3.5GHz spectrum band without any hindrance.

MTN is of the view that if allowed to participate in the December 3.5GHz auction, it will further engender a more robust and highly competitive spectrum auction process.

MTN, therefore, recommended that successful bidders in the prior auctions of spectrum in the 3.5GHz or indeed any other spectrum band, be allowed to participate in other spectrum auctions in the country, to ensure that all spectrums are assigned and used efficiently.

 5G Commercial Rollout 

 Determined to take the market by storm, MTN had earlier this year, launched its commercial 5G network in Lagos and Abuja, with plans to launch in additional five cities, namely Port Harcourt, Ibadan, Kano, Owerri, and Maiduguri.

The Chief Executive Officer of MTN Nigeria, Mr. Karl Toriola, had said customers with certain enabled devices would be allowed to connect with and try out the new service where coverage is available. 

To access the 5G network and enjoy its benefits, customers will need compatible devices, such as routers and mobile phones, which can be pre-ordered from designated MTN walk-in stores and online via the MTN Nigeria website and e-marketplace. The pre-ordered devices can be picked up or will be delivered to customers post the launch event scheduled to take place in the coming weeks.  

The advanced technology promises to extend the reach and capacity of MTN Nigeria’s data network in Nigeria and enable much faster speeds and lower latency, giving customers near-instant access to the things they care about and downloads that take seconds, instead of minutes.