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FG expects $197.4m from 5G auction on Dec 13

The Nigerian Communications Commission (NCC) has fixed the reserve price for the 3.5GHz spectrum auction for 5G services at $197.4 million (N75 billion). The auction is billed to hold on December 13.

The Director, Spectrum Administration, NCC, Oluwatoyin Asaju, who disclosed this during a Stakeholders’ Consultative Forum, yesterday, in Lagos, also said the Commission would first hold a mock auction on December 10.

Explaining the procedures for the auction, Asaju said: “A reserve price of approximately Seventy-Five Billion Naira (N75 billion) only, equivalent to One Hundred and Ninety-Seven Million and Four Hundred Thousand United States Dollars only ($197.4 million) is to be used.

“An Initial Bid Deposit (IBD) equal to 10% of the reserve price is adopted in line with the previous auction.”

Telcos want to pay $50M

However, the $197.4 million is almost four-fold of the auction reserve price of $50 million anticipated by telecommunications operators (Telcos).

A reserve price is a minimum amount that a seller is willing to accept as the winning bid during a bidding process.

In his presentation, the Project Director, MTN Nigeria, Abraham Orisadare, who spoke on behalf of the Telcos, said an auction reserve price of $50 million is preferable.

Besides, he urged the NCC to accept a staggered payment in view of the prevailing economic situation in the country, adding that payment should be made over a 5-year period taking into consideration the effect of COVID-19 on the industry and the economy.

The Telcos also canvassed a 20 -year duration for the renewal of licenses to promote efficiency in the sector.

New entrants are allowed to participate in the auction in addition to existing licensees. Licensees with outstanding debts that have secured Management’s approval for a payment plan will be allowed to participate.

But Asaju said the ascending clock auction process will be used and that the auction will be software-based, while provisions have been made for a backup with a manual auction should the software fail during the auction process.

On eligibility criteria for network operators, Asaju said only licensees with 100% regulatory compliance would be allowed to participate in the auction.

He continued: “New entrants are allowed to participate in the auction in addition to existing licensees. Licensees with outstanding debts that have secured Management’s approval for a payment plan will be allowed to participate.”

Also, he said NCC expects each service provider to roll out in each of the six geo-political zones in Nigeria, for effective and widespread reach of services.

Earlier, NCC’s Director, Public Affairs, Dr. Ikechukwu Adinde, explained that the stakeholder engagement forum would afford industry stakeholders the opportunity to discuss the draft Information Memorandum (IM) for the upcoming auction of the 3.5 gigahertz (GHz) spectrum band.

He added that the forum is an important regulatory prerequisite for the planned auction of the 3.5Ghz spectrum, which is necessary for the rollout of the 5G network in Nigeria.

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