The Nigerian telecoms regulator has uncovered broad plans for the upcoming sale of the 2.6 GHz frequency spectrum used to offer broadband services, to be done through competitive bids come next month in Abuja, the nation’s seat of power.
The impending sale of the 2.6 GHz spectrum has attracted the attention of prospective bidders preparing to participate in the auction, hoped to open new broadband market opportunities.
As contained in the Information Memorandum (IM) released by the Nigerian Communications Commission (NCC), the telecoms regulator, the spectrum will be is offered on a technology-neutral basis.
“The Generic Reserve Price (GR) is the minimum price at which a Lot shall be sold, which is the Reserve Price for one Lot of 2 X 5MHz and has a value of: Sixteen Million United States Dollars only (US$16,000,000.00). Each lot of 2 X 5 MHz represents 1 eligibility point. An applicant that pays the Intention-to-Bid Deposit (IBD) for 6 lots will have a total of 6 Eligibility Points”, the auction document says.
“The Reserve Price (R) for an applicant will be calculated as the GR multiplied by the number of lots (N) applied for by the applicant”, according to the IM that also explains that to qualify to bid in the Auction, applicants will not have to be a Licensed Network Operators in Nigeria.[quote font=”georgia” font_size=”22″ font_style=”italic” align=”right” bgcolor=”#” color=”#” bcolor=”#” arrow=”yes”]Bidders must not have a relationship with another Bidder. A relationship is defined as a situation where a Bidder has directly or indirectly an ownership stake of 10% or more in another Bidder.[/quote]
However, applicants will have to be companies registered in Nigeria with the Corporate Affairs Commission (CAC) while interested parties will be subject to a set of pre-qualification criteria and only parties that meet these criteria will be allowed to take part in the Auction.
The Auction of the available Lots in the entire 2 X 70 MHz block of the 2.6 GHz Spectrum band will take place in Abuja, Nigeria at a location to be specified by NCC.
The release of this Information Memorandum (IM) will be followed by a period for the submission of questions to the Commission relating directly to the licensing process defined in the IM.
The IM also stated that all additional information, including the answers to questions raised during the specified period will be made available through the Commission’s website and will form part of this IM. The identity of questioners will not be revealed. The auction will be an Ascending Clock Auction with Exit Bids as described in Section 6 of the IM.
Interested parties will be subject to a set of pre-qualification criteria and only parties that meet these criteria will be allowed to take part in the Auction.
The criteria are:
- Applicants will not be required to submit financial and or technical plans in the pre-qualification process, however, details must be provided in accordance with the compliance requirements laid out in Section 6.5.2.
- Applicants will be required to submit information using the templates provided in the Information Memorandum.
- Applicants must transfer an Intention-to-Bid Deposit (IBD) corresponding to the number of lots they wish to bid for into the designated account in cleared funds not later than 17.00 hours Nigerian Time on April 29, 2016. A Bank Guarantee, or similar instruments, will not be acceptable. This deposit will bind the Applicant to take up a license, should it be a Successful Bidder, at the Reserve Price or any higher bid value submitted during the process.
- Bidders must not have a relationship with another Bidder. A relationship is defined as a situation where a Bidder has directly or indirectly an ownership stake of 10% or more in another Bidder.
- The Commission does not have any plans to reserve Spectrum for any group. Reservation is considered as not being fair and not making the playing field level.
The Information Memorandum states that each winner who does not currently hold a Unified Access Service License (UASL) which is the Operational License, will be issued one at an additional fee of N374,600,000.00 only.
The Successful Bidders at the Auction will be issued 10-year National Spectrum Licenses on a State-by-State basis that will authorise the licensee to use the designated part of the Electromagnetic Spectrum to operate Advanced Broadband Service Network, according to the terms of the relevant operating Unified Access Service License (UASL) that has a 10-year tenure, NCC says.