The Federal Government has released 3.5Ghz spectrums to power deployment of 5G services in Nigeria, Communications, and Digital Economy Minister, Professor Isa Pantami says.
The handover further raises hopes of anticipated 5G rollout after Mafab Communications Limited and MTN Nigeria Plc, two tech companies emerged winners; each one staked $273.6m for two licences auctioned by the Nigerian Communications Commission (NCC) in December 2021.
The formal handover from the National Frequency Management Council (NFMC), the custodian of Nigeria’s frequency spectrum assets, to NCC, the telecoms regulator that is expected to assign them to winners in last year’s 5G spectrum auction.
The formal handover from the National Frequency Management Council (NFMC), the custodian of Nigeria’s frequency spectrum assets, to NCC, the telecoms regulator that is expected to assign them to winners in last year’s 5G spectrum auction.
Minister on What Spectrum Handover Mean for 5G Deployment
The Minister says the handover from NFMC to NCC, who will be responsible for allocation and assignment to the winners, represents another milestone in the implementation of the 5G Policy approved last month by President Muhammadu Buhari
The 5G Spectrum winners have till February 24, 2022, to pay the balance of their winning stakes at the auction, according to NCC auction rules guiding the sale of the spectral resources.
The NFMC chaired by the Minister, “is the custodian of all spectrums in Nigeria and also the apex body of spectrum”, Pantami says in a keynote address at the Public Workshop on National Policy on 5G Networks and Handover of Spectrum Allocation for 5G Deployment held today in Abuja.
According to him, NFMC members include NCC, National Broadcasting Commission (NBC), Ministry of Aviation, Ministry of Transportation, and Office of the National Security Adviser NSA), and “our responsibility is to collect spectrum from International Telecommunications Union in bulk and formally hand over these spectrum to regulatory institutions, statutory bodies, and these two bodies are Nigerian Communications Commission and National Broadcasting Commission,” Pantami says.
According to him, “NCC will be the one to handle for telecommunications while NBC is the one to handle that of broadcasting. It is because of this, why the Ministry itself which serves as the Secretariat for the National Frequency Management Council has been mandated also to handle non-commercial spectrum. NCC and NBC, both of them handle commercial spectrum, while the Ministry manages non-commercial spectrum.”
From the time he assumed duty on August 21, 2019, till date, Pantami says that on his watch, the ministry has assigned 148 non-commercial spectrum “while commercial spectrum are with NCC and NBC.”
The Minister says that as NFMC Chairman, “we are to officially hand over this to NCC, so that NCC can use its regulatory power to assign the spectrum to the winners of the auction conducted recently. These spectrums are for 5G, 3.5Ghz or to be specific from 3.52 to 3.90 (GHz), otherwise, you can say 380MHz. These are to be handed over to NCC officially.”
How Mafab Communications and MTN Nigeria Won 5G Spectrum
Ahead of the auction day on Monday, December 13, 2021, MTN, Airtel Nigeria and Mafab were pre-qualified as bidders after having met the requirements stipulated in the Information Memorandum (IM) for the spectrum sale, according to NCC.
The three bidders had also on Friday, December 10, 2021, participated in a mock auction secession that served as a precursor to the Main Auction.
That day’s auction which went through 11 rounds of bidding and lasted eight hours saw Mafab Communications Ltd and MTN Nigeria Plc emerging as the two successful winners of the 3.5 GHz spectrum auction, the prized asset that will power the deployment of 5G technology, which the NCC says will “support the delivery of ubiquitous broadband services in Nigeria.”
The outcome of the auction, NCC says, is “an exercise that clearly demonstrated demand outstripping supply, with the Ascending Clock Auction System adopted by the Commission, the three bidders participated in the intensely competitive auction bid.”
At round one, the bid price was fixed at $199,374,000.00; $201,367,740.00 at second Round; $204,388,356.10 at third round; $209,407,962.50 at fourth round and $215,782,901.30 at the fifth round.
The auction prices increased progressively to $224,414,217.43 at the sixth round; $231,146,643.96 at the seventh round; $240, 392,509.71 at the eighth round; $251, 210,172.65 at the ninth round; and $263,700,050.00 at round 10.
The auction process reached a peak at round 11 when the bid price graduated to $275,904,886.25 with all three bidders still actively participating.
At this juncture, the main stage of the bids ended at the conclusion of round 11 when Airtel listed an exit bid of $270,000,000 while MTN posted an exit bid of $273,000,000, a development that gave way to the Assignment Stage.
“At this point,” the telecoms regulator says, “Airtel had dropped off from the race having posted a lower exit bid, thus leaving Mafab and MTN as winners of the two available lots.”
Professor Umar Garba Danbatta, NCC Executive Vice Chairman who doubled as Auction Overseer who recalls the processes and activities leading up to the successful spectrum sale says the telecoms regulator published a public notice on its decision to award two lots of 100 megahertz (MHz) Time Division Duplex (TDD) available in the 3.5 GHz band through an auction process to support the delivery of ubiquitous broadband services for the deployment of 5G network in Nigeria.
“At this point,” the telecoms regulator says, “Airtel had dropped off from the race having posted a lower exit bid, thus leaving Mafab and MTN as winners of the two available lots.”
Nigerian Communications Commission (NCC).
“Subsequently, an Information Memorandum was issued on November 10, 2021, in which Bid applications for the available spectrum lots were invited. By the deadline for receipt of applications on November 29, 2021, the Commission received applications from three licensed telecoms companies, viz: Airtel Networks Limited, Mafab Communications Limited, and MTN Communications Nigeria Limited,” Danbatta says.
“The auction”, the NCC chief says, “held successfully today, Monday, December 13, 2021, at the Transcorp Hilton Hotel, Abuja with the three bidders competing for the available two slots. The Commission adopted the Ascending Clock Auction format which ended after Round 11 and proceeded to the Assignment Stage. It is my pleasure to announce that at the end of the auction, Mafab Communications Limited and MTN Communications Nigeria Limited emerged as provisional licence winners.”
The winning bid price for the auction is $273,600,000 for each lot of 100 MHz TDD and the provisional winners are expected to pay the Winning Bid price, less the Intention-to-Bid Deposit, by February 24, 2022, according to Danbatta who declares that the auction process was efficient, fair, credible, well-organised and transparent and was designed to deliver the ideal outcome.
Accordingly, Danbatta adds, “the strongest bidders have emerged provisional winners, raising a substantial amount for the Federal Government.”
As sequel to the successful auction by the two winners, and in line with the processes outlined in the IM, the provisional winners proceeded to the Assignment Stage to negotiate for their preferred frequency slot.
“MTN Communications Nigeria Plc made an offer of $15,900,000 for the assignment of a preferred Lot, while Mafab Communications Limited made an offer of $11,120,000 for a preferred Lot. Thence, MTN Communications Nigeria Plc, having made the highest offer was given the right to select its most preferred Lot and it selected Lot 1 (3500-3600 MHz), while Lot 2 (3700-3800 MHz) is consequentially assigned to Mafab Communications Limited at no extra cost,” Danbatta says.
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