This is how Nigeria’s ₦75B 5G auction will hold

By Marozoka Chiamaka Oruame

Ready! Set! Go! 

Nigeria’s telecom authorities have pegged the reserve price for 5G licence at ₦75 billion (about US$197.4m). This is the baseline for the auction process. It could go for more depending on how the contest plays out in Africa’s largest mobile market of over 180 million subscribers.

An Initial Bid Deposit (IBD) equal to 10% of the reserve price has also been adopted in line with the previous auction for GSM licence in Nigeria.

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The guidelines were reiterated this week in Lagos at a Stakeholders Engagement Forum based on the published Draft Information Memorandum (IM) for the upcoming auction of the 3.5GHz spectrum band, as part of Nigeria’s 5G technology deployment plan.

This IM provides guidance and process that the Commission has decided to adopt for the licensing of the 3.5 GHz band, including details of the Spectrum to be made available, the prequalification process and the Auction process.

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Here’s a quick guide to understanding how the 5G auction will play out

3.5 GHz Spectrum Availability

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• Five lots of 100 MHz each TDD are to be cleared at different periods depending on the level of encumbrances on the slots.
• For the purpose of this auction, two lots of 100 MHz each are to be offered in the first phase of the auction.

Auction Process

• Ascending Clock Auction will be used.
• The auction is software based.
• Provisions have been made for manual auction should the auction software fail during the auction process.
• A Mock auction shall precede the main Auction.

Reserve Price

• A reserve price of approximately ₦75 billion (Seventy-Five Billion) Naira only, equivalent to One Hundred and Ninety-Seven Million and Four Hundred Thousand United States Dollars only (US$197,400,000.00) is to be used.
• An Initial Bid Deposit (IBD) equal to 10% of the reserve price is adopted in line with the previous auction.

Eligibility

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• New entrants are allowed to participate in the auction in addition to existing licensees; and
• Only Licensees with 100% regulatory compliance would be allowed to participate in the Auction.
• Licensees with outstanding debts that have secured Management’s approval for a payment plan will be allowed to participate.

The Licence

• The auction comes with a 10-year Spectrum Licence and a minimum requirement of a UASL Operational Licence.
• New entrants or Licensees without a UASL will be required to additionally obtain a UASL Operational Licence.

Requirements

Network Operators would be required to:

• Meet all Auction conditions as specified in the IM.
• Carry out Periodic Penetration Testing, and Vulnerability Scan of their Networks to ensure security of the

Roll Out Obligations

The roll out obligations proposed are as follows:

Year 1 to 2

• Starting from the effective date of the licence. Rollout service in at least one State in each geo-political zone: SW, SS, SE, NC (Including FCT), NW and NE zones.

Year 3 to 5

• Additional 6 States other than those in Year 1 to 2, across the six geo-political zone.

Year 6 to 10

• Operators are encouraged to roll out across all other States.
• Service roll out in each state would mean a minimum of 5 sites in a state.
• Minimum Download speed of 100 Mbps is to be achieved by the operators and shall be measured using applicable measurement tools.
• A Risk Management Framework for 5G shall be developed in due course.

(The information is based on Highlights on Draft Information Memorandum (IM) for 3.5 GHz auction presented by NCC’s Director, Department of Spectrum Administration (DSA) Oluwatoyin Asaju at the Stakeholders Engagement Forum in Lagos).