NCC offers 14 slots in 2.6GHz licensing auction
With a planned auction in the 2.6GHz spectrum frequency band licensing scheduled to start on May 16 in Abuja, the Federal Government, through the Nigerian Communications Commission (NCC) has announced plans to offer 14 slots of the frequency to telecommunications companies through bidding processes.
According to the Information Memorandum (IM) of the auction, released at the weekend, by the NCC, the 2.6GHz spectrum is offered on a technology neutral basis and can be used to provide any telecommunications services.
The IM defines the process that NCC has decided to adopt for the licensing of 2 X 70 MHz paired spectrum available in the 2.6 GHz band. It provides information on the Nigerian telecommunications market, details of the spectrum to be made available, the prequalification process, the auction process and indicative timetable.
NCC noted that the proposed licensing the 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 of 2013.
Findings showed that the success of the auction is expected to add to government coffers at least N44 billion ($224 million) from the licensing of the 14 lots.
Specifically, NCC is offering 14 Lots of 2 X 5 MHz FDD paired spectrum in the 2.6 GHz band ranging from 2500 – 2570MHz and 2620 to 2690MHz (totaling 2 X 70 MHz) for auction. The Generic Reserve Price (GR) is the minimum price at which a slot shall be sold, which is the Reserve Price for one slot of 2 X 5MHz and has a value of $16,000,000.00 only.
The IM explained that each lot of 2 X 5 MHz represents one eligibility point. An applicant that pays the IBD for six lots will have a total of six Eligibility Points. The Reserve Price (R) for an applicant will be calculated as the GR multiplied by the number of Lots applied for by the applicant. For example, Reserve Price for an applicant that applied for six Lots i.e. six Eligibility Points is: $16,000,000.00X 6 = $96,000,000.00.
Furthermore, the commission explained that the spectrum lots won by each bidder would 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 of the States of the Federation as well as for the FCT to each winning bidder.
The 72 page IM stated 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.
NCC said that applicants must transfer an Intention-to-Bid Deposit (IBD) equal to Intention-to-Bid Deposit (IBD) for a Lot which is $1,600,000.00 multiplied by its Eligibility Points (Number of Lots applied for) 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.
The IBD is the deposit payment required to be made by all applicants as part of the pre-qualification process. This payment must be settled before the application submission date (as defined in the licencing process timetable). The IBD is a commitment from the applicant to pay at least the Opening Bid for the license, as specified in this IM, and to participate in the auction process.
Failure to meet these obligations shall result in the forfeiture of the IBD. On April 29, 2016 applicants must have transferred the IBD so that it is received as cleared funds in the designated account. This forms part of the pre-qualification criteria.
Meanwhile, approved bidders will be required to participate in a Mock Auction that will replicate the actual auction process. This Mock Auction will take place on or around May 16, 2016. The auction will be an Ascending Clock Auction.
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