MTN Nigeria and Airtel Nigeria yesterday clashed over the propriety or otherwise of allowing the only operator offering services on the fifth generation (5G) technology (MTN) to participate in the fresh bid round to offer two lots of 100 megahertz (MHz) Time Division Duplexing (TDD) in the 3.5 gigahertz (GHz) band proposed for auctioning.
An official of Airtel who spoke during Stakeholders’ Engagement Forum on Information Memorandum (IM) for the planned auction of 5G spectrum licence in Lagos, questioned why the Nigerian Communications Commission (NCC) should allow MTN Nigeria to participate in the fresh bid round.
Responding earlier to the draft IM for the bid round, MTN had among others, said: “We note with concern the provision that “the Commission places a cap of 100MHz as the maximum amount of Spectrum a Licencee can acquire in the 3.5GHz band.” It therefore said: “MTN respectfully reiterates its prior recommendation that to ensure that all the spectrum can be assigned and used efficiently, it will be appropriate to allow successful bidders in the prior auctions of spectrum in the 3.5GHz (or indeed any other spectrum band) to participate in future awards. It is MTN’s considered view that cumulative cap of 200MHz in the 3.5GHz band would appropriate across all awards in the band.”
But Airtel had questioned the propriety of MTN’s participation in the new bid round, noting that it was capable of breeding a monopoly. It urged the NCC to look into it.
But responding, General Manager, Regulatory Affairs at MTN, Ikenna Ikeme, said Airtel has no right to stop any investor ready to invest in the economy. He said if MTN is denied the right to participate in the bid round, the huge cash it spent on preferred Lot at the last bid round last year would have gone to ruins.
According to the Executive Vice Chairman, NCC, Prof Garba Dambatta, at the last bid round, MTN Communications Nigeria Plc had made an offer of $15,900,000 for the assignment of a preferred Lot, while Mafab Communications Limited made an offer of $11,120,000 for a preferred Lot. MTN Communications Nigeria Plc, having made the highest offer was given the right to select its most preferred Lot and it selected Lot 1 (3500-3600 MHz), while Lot 2 (3700-3800 MHz) was consequentially assigned to Mafab Communications Limited at no extra cost.
Ikeme explained that original equipment manufacturers (OEMs) produce equipment that are compatible with contiguous spectrums, adding that denying the operator the opportunity to participate will inevitably make nonsense of its huge investment on the preferred lot.
Responding, Executive Commissioner (Technical Services) at NCC, Engr. Ubale Maska, said the Commission had taken note of the observations and comments of stakeholders on the issue. He said the essence of the forum was also to get the buy-in of stakeholders in the industry with a view to coming up with a robust policy framework.
Earlier on, in its response to the draft IM, Airtel had sought an administrative grant of 5G spectrum licence and paying the spectrum bid price of last year.
According to the operator, its participation in the last bid round in the 3.5GHz spectrum led to boosting the Federal Government’s revenue.
It therefore urged the Commission to grant it the licence without going through the process of auctioning.
It argued that the companies that didn’t participate in the process of last year should be made to go through the crucible of bidding.
The NCC however said it will only assign spectrum through open, transparent and competitive bidding.
The NCC had placed the reserve price of about N75billion ($197.4million) for each slot of the spectrum. Airtel had listed an exit bid of $270,000,000, while MTN had posted an exit bid of $273,00, thus making it and Mafab Communications Ltd the winners of the bid round.
For the proposed auction bid round, the Commission has fixed $273,600,000.00 or its equivalent in Naira at the prevailing Central Bank of Nigeria (CBN) rate at the time of the auction as its reserve price.
An Initial Bid Deposit (IBD) equal to 10 per cent of the reserve price is adopted in line with the previous auction.
Dambatta, in his welcome address, said Nigerian communications market is one of the biggest in Africa and is also the largest contributor to the Information Communications Technology (ICT) sector of the economy. He said from the latest statistics, the country has an estimated population of 214 million, with an average growth rate of 2.6per cent annually. Approximately 76.46per cent of the population is under the age of 35. In line with these demographic changes, broadband penetration increased from less than 10per cent in 2015 to 45.09per cent in September 2022.
“Arising from the significant increase in broadband penetration in Nigeria, it has become vital for us to move to the next phase of global development of the sector, given the opportunities that abound for all stakeholders in the industry and the economy at large.
“Therefore, in line with our Strategic Vision (Implementation) Plan 2021 2025, which among other things, seeks to promote fair competition, inclusive growth, increased investment and innovative services, and also facilitate strategic collaboration and partnership, we intend to further deepen broadband penetration and encourage fair competition in the rollout of 5G services in Nigeria by auctioning the available lots in the 3.5GHz Spectrum band. This is the reason why we have invited our stakeholders to elicit comments on the draft Information Memorandum (IM) for the upcoming auction,” he said.
He said the mandate as a Commission is to facilitate investment while also providing a platform for entry into the Nigerian market for the provision and supply of communications services, equipment and facilities, and promotion of fair competition in the communications industry; etc.
“Following the successful auction of the initial two lots in December 2021, the Commission has received requests to administratively licence the available lots at the previous auction fee. However, the Commission, in line with its powers under the Nigerian Communications Act 2003, has decided to licence the available lots in the 3.5GHz band through the Auction Method which is a transparent and efficient approach that can open up opportunities for new entrants as well as deepen competition in the industry.
“The Commission has committed enormous resources to ensure that harmonized Spectrum is secured and released in a timely manner for present and future rollout of services that will underpin the Fourth Industrial Revolution (4IR), including International Mobile Telecommunication (IMT-2020) services. We have kept ourselves abreast of developments at international fora, including ITU-R Study Groups to enable the allocation of strategic Spectrum to IMT services especially the IMT-2020 which has been on the front burner in the last two ITU-R Study Cycles. Hence, it is important that we ensure the timely release of the Spectrum bands necessary for 5G deployment to the industry to enable us reap the immediate and envisaged benefits of 5G technology, and facilitate the development of Nigeria’s Digital Economy to foster national growth,” Danbatta said.