For the second time, the Nigerian Communications Commission (NCC), has postponed the proposed auctioning of the 2.6 gigahertz spectrum band ‘till further notice’, a situation that is frustrating the business plans of prospective investors seeking to play critical roles in Nigeria’s emerging broadband market, industry observers have said.
According to them, the continuous postponement of the spectrum auction could threaten the country’s target of achieving 30 percent broadband penetration by 2018. In November, the telecoms regulator had initially postponed the proposed spectrum auction.
Only last week, the NCC declared that 14 licences valued at N130.5bn were up for grabs in the 2.6GHz spectrum auctions planned to begin May 5 in Abuja. The latest development, according to market observers, is not sitting well with prospective investors and mobile operators, who will however have to rejig their respective business plans and projections to meet current realities.
Eugene Juwah, executive vice chairman, NCC, confirmed the postponement of the spectrum auction, in a statement, without stating reasons for the new postponement.
“The Nigerian Communications Commission (NCC), on behalf of the Federal Government of Nigeria, regrets to inform parties interested in participating in the Auction of Frequency Spectrum
Licenses in the 2.6GHz band that it has decided to postpone the process of the Auction until further notice,” the NCC boss stated in the statement.
Juwah however said by the announcement, “The 2.6GHz indicative auction timetable is suspended,” saying that “We regret any inconvenience caused by this suspension.”
The commission had, last November, postponed the plan to auction the spectrum band, initially slated for early December, 2014.
In a statement issued to announce the postponement, the NCC had informed parties interested in participating in the auction of frequency spectrum licences in the 2.6 GHz band that it had decided to postpone the process of the auction due to ‘administrative constraints.’
After about four month hiatus, the Commission auspiciously announced two weeks ago that it had resumed the auction, which, it said, would now take place during the week commencing May 4, but effectively hold from May 5-8, 2015.
The Commission also released an reviewed Information Memorandum (IM) on the 2.6Ghz spectrum auction, whose licensing would adopt an Ascending Clock Auction. In addition, the final result of the winners of the spectrum auctions was also planned to be announced on June 2, 2015 before the latest postponement .
The IM defines the process that the Commission has decided to adopt for the licensing of 2×70 Megahertz (MHz) paired spectrum available in the 2.6GHz band.
The IM also provides information on the Nigerian telecommunications market, details of the spectrum to be made available, pre-qualification process, the auction process and indicative timetable among others. The auctioning of the 2.6Ghz spectrum is expected to provide the necessary spectrum resources to telecoms players that need such resources to deploy broadband internet services across the country.
Speaking in Lagos on the proposed auction, Austin Nwaulune, director, spectrum administration at NCC, had said that the 2.6GHz spectrum planned licensing had 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 2013-2018.
It was gathered that the NBP, approved by the federal government in 2013, is a policy direction targeted at increasing broadband penetration to 30 per cent in the next four years. Noting that the spectrum band was key for both new entrants and incumbent operators, Nwaulune said that the Commission arrived at this after wide consultations with relevant industry stakeholders to determine the best way to issue the spectrum.
“Based on these and observations of developments in the international licensing trends, the Commission has decided to license the available 2×70 MHz slot in slots of 5MHz to be aggregated by applicants through the spectrum auction process,” he said.
The spectrum, it was learnt, will be offered on technology-neutral basis but for rollout basis, the Commission said it would follow the International Telecommunications Union (ITU) recommendation, setting aside spectrum in the 2.6GHz band for the provision of Advanced Wireless Broadband Services.
According to IM, while the reserved price has been pegged at $16m for a lot of 2×5 megahertz (MHz), at the end of the auction, each winning licensee will be issued a National Spectrum Licence for 10 years and will also qualify for a Unified Access Service Licence (UASL).
“On completion of the Auction Process, the Commission will issue each winner a ten 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 N374.6m,” the IM stated.
Ben Uzor
