NCC to auction 2.6GHz band in May

BARRING any unforeseen circumstances, the planned auction of the 2.6GHz spectrum band by the Nigerian Communications Commission (NCC) has been scheduled to hold from May 5-8, in Abuja.

According to the Information Memorandum (IM) released by the commission, the auction will take place during the week commencing May 4, which will take an Ascending Clock Auction format.

Meanwhile, the latest subscriber statistics has shown that the country’s Internet subscribers have hit 82 million.

The statistics showed that mobile Internet users increased from 76.3 million at the end of December 2014 to 81.8 million by January, which is additional 5.5 million Internet users on the narrow-band plat form.

The IM for the suction showed that media briefings would also be provided at various stages during the process, leading to the public announcement of the final auction result.

According to the IM, the commission has decided to adopt for the licensing of 2 X 70 MHz paired spectrum available in the 2.6 GHz band.

The 2.6Ghz spectrum auction ought to have taken place in December 2014, but was postponed indefinitely by the regulator due to what it called some “administrative constraints.”

Speaking on the new IM, the Executive Vice Chairman of NCC, Dr. Eugene Juwah, said since year 2000, the Nigerian telecommunications market has witnessed major increase in competition driven by the government’s liberalisation policies.

He said the development of competition has, in turn, led to increased growth in the number of connections and improved services for subscribers as anticipated.

Juwah, thus, explained that the proposed licensing of 2.6 GHz Spectrum has been influenced by the need to open up the space for the delivery of present and future generations of broadband services to subscribers in consonance with the Nigerian National Broadband Plan (NBP) of 2013.

The NCC boss noted that the commission had consulted with the relevant industry stakeholders to determine the demand and the best way to issue the Spectrum.

“Based on these and observations of developments in international licensing trends, the Commission has decided to license the available 2 X 70 MHz slot in slots of 5 MHz to be aggregated by applicants through the Spectrum auction process,” he said.

Technically, the commission offers 14 Lots of 2 X 5 megahertz Frequency Division (FDD) paired Spectrum in the 2.6GHz band ranging from 2500 – 2570MHz and 2620 to 2690MHz (totaling 2 X 70MHz) for auction.

Juwah, while stating that the spectrum is offered by the Commission on a technology-neutral basis, however, stated that for roll‐out of services, the Commission intends to follow the International Telecommunication Union (ITU) recommendations setting aside Spectrum in the 2.6GHz band for the provision of advanced wireless broadband services.

“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 $16 million. Each lot of 2 X 5 megahertz represents 1 eligibility point.

“An applicant that pays the Intention-to-Bid Deposit for six lots will have a total of 6 Eligibility Points. So, the reserve price for an applicant will be calculated as the GR multiplied by the number of lots (N) applied for by the applicant,” he said.

Meanwhile, the IM explained that, “On completion of the Auction process, the Commission will issue each winner a 10 year National Spectrum licence on a state-by-state basis and the Federal Capital Territory.

“Each winner, who does not currently hold a Unified Access Service License (UASL), which is the operational licence, will be issued one at an additional fee of N374.6 million.”

On the increasing subscriber base, further analysis of the NCC statistics showed that the users were mainly on the GSM network with MTN Nigeria having 39.1 million subscriptions.

Globacom, Airtel and Etisalat have 17.6 million; 14.9 million and 10.1 million subscribers respectively.

Going by statistics from the Internet World Stat, Africa currently has 297.9 million Internet users, the 82 million subscribers in Nigeria puts the country has number one on the continent, followed by Egypt, South Africa, Morocco and Kenya with 36 million; 20 million; 17 million and 13 million respectively.

On the pre-qualification criteria, the IM states that applicants in the allocation process will not be required as a pre‐qualification criterion to hold any telecommunications operational license in Nigeria.

“However, the applicants must fulfill the following prequalification criteria: Applicants must be a company registered in Nigeria with the Corporate Affairs Commission (CAC); applicants must be independent (10 per cent ownership interest test as defined in Section 6.6.2 of this IM from all other Applicants under this allocation process.

“Applicants must also transfer an Intention‐to‐Bid Deposit (IBD) for the amount into the designated account in cleared funds. 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.

“Licensed operators participating in the process must fulfil all existing obligations to the Commission including payments of Annual Operating Levy (AOL), Spectrum and National Numbering Plan fees prior to prequalification,” the IM stated.