Nigeria’s 5G licence hangs in air as sole bidder Airtel picks one slot

Technology Times has learnt that Airtel Nigeria, the sole bidder in the cancelled Nigeria 5G auction, indicated an interest in only one of the two licences up for sale, a development that will see the telecoms umpire considering the fate of the lone slot. T he Nigerian Communications Commission (NCC) yesterday announced that the 5G auction billed for December 19 was cancelled after only two applicants, Standard Network & Connections Limited (Standard Network) and Airtel Networks Limited (Airtel), expressed interest in bidding for two lots of 3.5GHz spectrum with each carrying a reserve price tag of $273.6 million for winners to deploy the ultra-fast mobile broadband service in the country. “However,” Mr Reuben Muoka, NCC Public Affairs Director says in yesterday’s announcement that “only Airtel paid the Intention to Bid Deposit (IBD) as stipulated in the Information Memorandum ( IM ) whereas, Standard Network sent an email appeal for the deadline to be extended by twelve (12) working days which was not acceptable in view of the auction timetable.” [caption id="attachment_150605" align="aligncenter" width="997"] Professor Umar Danbatta, NCC Executive Vice Chairman/CEO[/caption] Yesterday’s statement by NCC was silent on the number of eligibility points scored by Airtel after the mobile operator was declared the sole bidder; Standard Network’s extension appeal was rejected, and the scheduled 5G auction was cancelled. Yesterday’s statement by NCC was silent on the number of eligibility points scored by Airtel after the mobile operator was declared the sole bidder; Standard Network’s extension appeal was rejected, and the scheduled 5G auction was cancelled. Meanwhile, Mr Muoka today confirmed to Technology Times that Airtel expressed interest in only one of the two licences on offer by NCC in the 5G auction corresponding to one eligibility point conferred by each lot of 100MHz in the 3.5GHz spectrum band. Technology Times review of the IM shows that the unforeseen development will see the NCC deciding the way forward in the assignment of the remaining lot of 100MHz in the 3.5GHz spectrum band. The telecoms regulator’s rules placed a cap of 200MHz as the maximum amount of spectrum that any applicant can acquire in the 3.5GHz band. Based on the auction rules, a licensee like one of the winners in round one of 5G auction held last year, MTN Nigeria, with an existing assignment in the 3.5GHz band, is eligible to bid for only one Lot of 100MHz. “However,” the rules say that “Applicants without Spectrum holding in the 3.5GHz band are eligible to bid for the two Lots on offer.” While the rule allows Airtel to be eligible to bid for the two lots, the sole bidder’s expression of interest for one will require NCC to decide the next steps in the assignment of the remaining lot of 100MHz. [caption id="attachment_151564" align="aligncenter" width="1735"] The Nigeria 5G auction rules show lots and prices for the 3.5GHz spectrum band.[/caption] Nigeria 5G auction: What the rules say “The Reserve Price (RP) is the minimum price for one Lot of 100MHz TDD for a 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 rule says. Applicants must pay the IBD for each Lot which is 10% of the Reserve Price of the Lot into the designated account in cleared funds that must have been transferred 17.00 hours (WAT) on December 5, 2022. “The IBD,” the telecoms regulator says, “is a commitment from the Applicant to pay at least the Opening bid for the licence, as specified in this IM, and to participate in the auction process.” This IBD, the rules says, “will bind the Applicant to take up a Licence, should it become a successful Bidder, at the Reserve Price or any higher bid value submitted during the process. With Airtel Nigeria becoming the sole bidder, the mobile operator will not be required to pay the added N374.6m for a Unified Access Service Licence (UASL) that is applicable to new entrants, since existing UASL holders will not be required to obtain any additional Licence, but will use its UASL subject to the conditions contained in the 3.5GHz Spectrum Licence, according to the rules. Nigeria is embracing the 5G era by opening up the playing field to existing and new entrant players to deploy the service supporting faster broadband speeds with lower latencies than any previous generation of mobile technology for the triple play services of voice, data and video. The Nigerian 5G plan hopes to add value to the nation’s broadband landscape that counts service providers like Mobile Network Operators (MNOs), Fibre to Home Operators, Fixed Wireless Access Operators and Satellite providers, among others. Nigeria is home to a thriving telecoms market counting 214,6969,227 active phone lines, representing 112.4%; 152,710,160 internet connections, and 86,949,451 active broadband connections representing 45.55% as of October 2022, according to NCC official data . Within the mobile market, MTN Nigeria leads with 83,271,892 (38.85%) active phone lines followed by Glo mobile, 59,637,842 (27.82%); Airtel Nigeria, 58,669,071(27.37%) and 9mobile, 12,771,293 (5.96%). Just like was done in round one of the Nigeria 5G auction won by MTN Nigeria and Mafab Communications Limited, NCC had pitched the “significant growth” experienced by the country’s telecoms market as some of the opportunities available for those interested in the 5G auction. As of July 2022, NCC says, the market had increased from about 400,000 connected phone lines in 2001 when the market was deregulated to 206.4 million active subscribers. Some of the key indicators have seen broadband penetration increase from less than 10% as of 2015 to 44.49% in July 2022, while Nigeria has high potential in terms of its population size and annual population growth rate of 2.5% per annum. Nigeria also has surging levels of ICT adoption, Internet take-up and broadband services driven by its vibrant and virile youth population, and its vantage position as the largest economy in Africa, NCC says. “The growth of the Nigerian communications sector since liberalisation, 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, according to the telecoms regulator which states that Internet penetration grew from 3% in 2004 to 79.04% (151,021,062) as at June 2022. NCC is also opening up the 5G space because opportunities for growth have been identified in the market where there are operators providing access to the Internet in one form or the other in Nigeria. “Broadband delivery is largely via mobile connections. 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% below the age of 35,” NCC says.

Technology Times has learnt that Airtel Nigeria, the sole bidder in the cancelled Nigeria 5G auction, indicated an interest in only one of the two licences up for sale.

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