5G: NCC, telcomm firms disagree on 3.5GHz spectrum price, duration

The Nigerian Communications Commission has released a draft information memorandum for 3.5GHz spectrum auction to facilitate the 5G roll-out in 2022 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 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 on Thursday, presented the 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 a 10-year 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 roll-out time to utilise the spectrum in offering telecoms services to subscribers.

Reacting to the N75 billion reserve price, telecoms operators such as MTN, Airtel, Huawei and Intelsat called on the 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.