Smarting from the drudgery that attended the sale of the 2.3GHz spectrum and the attendant delays on the roll out obligation by Bitflux; the firm that emerged as preferred bidder and eventual winner of the strategic spectrum, the Nigerian Communications Commission (NCC) said it has come up with a water tight auction plan and processes for the rollout of services on the 2.6GHz spectrum.
The Commission’s Director of Spectrum Administration, Austin Nwaulune told a community of ICT Journalists in Lagos, on Thursday, 14 April, that the auction of the 2.6GHz spectrum may hold from May 17 to 19th, 2016 in Abuja. He said that there are 14 lots to be put for sale by the Commission. Each bidder is allowed a minimum application of four lots and maximum application of eight lots. According to him, if no more than the 14 lots are bided for at the close of the timeline for the submission of applications by prospective bidders, then the winners would be announced based on the generic reserved price of $16 million per lot of the 2.6GHz spectrum. He said each applicant will also be required to make a mandatory payment of 10 per cent of the Generic Reserve Price based on the number of lots it bided for as Intention-to-bid deposit.
Nwaulune, however, said that if the Commission receives applications in excess of the 14 lots available for sale, the sale process will be migrated to the auction stage. He said that the Commission was paying particular attention to the 2.6GHz, otherwise also known as 2.5GHz or 2.7GHz because the spectrum which spans 2.5GHz to 2.7GHz, is the fulcrum for the deployment of true broadband to the nooks and crannies of Nigeria. But in the Information Memorandum (IM) for the auction in Nigeria, it is addressed as 2.6GHz.
“The spectrum lots won by each bidder will be assigned on a nationwide basis covering all the states of the federation and the FCT. However, for the purpose of enforcing the ‘used it – or – lost it’ clause, a License will be issued for each states of the federation as well as for the FCT to each winning bidder,” he noted.
Besides, he stressed 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 three hundred and seventy four million, six hundred thousand Naira only (N374, 600,000.00).
To actually qualify to participate in the process, he said that each applicant must be: a company registered in Nigeria; not indebted to the Commission; mutually exclusive of other applicants among other conditions.
The commission initially announced its intention to sell the 2.6GHz spectrum in Q3 2014 and had a stakeholders’ forum on August 28 same year. But after the initial activities driving the process, the Commission in 2015 suspended the auction of the 2.6GHz and 5.4GHz frequency bands, citing administrative constraints for the suspension. This current process for the sale kicked off with the media announcement in February this year.
Nwaulune said the Commission was paying special attention to the sale of the 2.6GHz spectrum because it is a critical infrastructure for the delivery of true broadband services in line with the objectives of the government’s National Broadband Plan (NBP). The NCC chieftain stated that the 2.6GHz is a capacity spectrum, though with some element of penetration, unlike the strictly penetration capacity which other spectra represent. While saying that each bid winner would be assigned contiguous spectrum, he noted as well that 2.6GHz spectrum is more cost effective and the equipment are also readily available. He debunked insinuations that the sale was designed to raise revenues for the Nigerian government. He said that old and new operators need capacity in the bourgeoning digital space, hence the decision of government to closely manage the allocation of the scarce spectrum resource.
He added that the offer of the 2.6GHz spectrum is open to both existing new entrants and intending bidders must have followed the process and submitted all necessary documents on or before the submission deadline of April 28, 2016. Details in the IM, which is available on NCC website, showed that a mock auction will begin on May 16, 2016 with the auction proper scheduled for the 17th through to the 19th of May, 2016 while publication of final winners will be done on June 13, 2016.
Nwaulune stated further that the winning licensee shall be required, after the operational license award, to roll out services in at least two state capitals in each of the six geo-political zones, the remaining thirteen state capitals across the six geo-political zones, all these within a specified time frame and within six months from the award of license.
In 2013, the Commission auctioned the 2.3GHz spectrum which was won by Bitflux Communications Limited. Responding to the intractable delay in meeting the rollout deadline obligation by Bitflux, Nwaulune said that the winner will be given one year to rollout services. According to him, “in the event of the winning licensee’s inability to deploy services as specified herein, the commission reserves the right to sanction the licensee based on relevant sections of existing regulations except for areas where Force Majeure is established. We have done it in such a way that in 8 years the whole nation would have been covered. This is also to ensure that we have broadband in all the cities in Nigeria”.
He assured that the Commission had put the experience of 2.3GHz behind it and had articulated a robust plan to ensure that such is not repeated in the management of the 2.6GHz rollout engagement post award of licenses to the prospective winners.
The NCC chieftain said that the spectrum will be offered on technology neutral basis. He assured that the rollout of telecommunications services will be in accordance with the International Telecommunications Union (ITU) recommendation. And while noting that 108 networks have been deployed on the 2.6GHz spectrum across the globe, he stressed that this spectrum has become important to Nigeria because it has large capacity for the delivery of broadband and that it has more deliverables than the 900MHz and 1800MHz.