NCC to get N44bn from licence of 2.6GHz auction

By ADEDEJI ADEYEMI FAKOREDE

THE Nigerian Communications Commission (NCC) is to get at least N44 billion ($224 million) from the planned auction of 14 lots in the 2.6 Gigahertz spectrum band licencing to telecommunication operating companies from May 16, 2016 in Abuja.

The spectrum is offered by NCC on a technology neutral basis and can be used to provide any telecommunications services.

For roll-out of services, NCC intends to follow the International Telecommunication Union (ITU) recommendation setting aside spectrum in the 2.6GHz band for the provision of advanced wireless broadband 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.

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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 of 2013.

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 Lot shall be sold, which is the Reserve Price for one Lot of 2 X 5MHz and has a value of $16,000,000.00 only.

Each lot of 2 X 5 MHz represents one (1) eligibility point. An applicant that pays the IBD for six (6) 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 (N) applied for by the applicant. For example, Reserve Price for an applicant that applied for six Lots i.e. six Eligibility Points is: US$16,000,000.00X 6 = US$96,000,000.00.

The spectrum lots won by each bidder will 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 Licence will be issued for each of the States of the Federation as well as for the FCT to each winning bidder.

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The 72 page Information Memorandum states that 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 N374,600,000.00 only.

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It said that applicants must transfer an Intention-to-Bid Deposit (IBD) equal to Intention-to-Bid Deposit (IBD) for a Lot which is US$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 Licence, 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; see Section 6.6.5. This forms part of the pre-qualification criteria.