As 5G Rollout in Nigeria Beckons

Last week’s meeting of the payment deadline for 5G licence by MTN Nigeria Plc and Mafab Communications, is a clear indication that both telecoms operators are ready to roll out 5G network in Nigeria, anytime soon, writes Emma Okonji

Nigerians from all walks of life, including industry stakeholders, were in jubilation last week when the news of the payment for 5G license fees by MTN Nigeria and Mafab Communications was first reported by THISDAY Newspapers.

Both telecoms operators met the payment deadline of February 24, 2022, when they paid the bid price of $273.6 million each, with an additional payment of $15.9 million by MTN Nigeria, to get the first slot in the 3.5GHz spectrum band that was auctioned last December by the Nigerian Communications Commission (NCC), for 5G licence.

Given the additional $15.9 million paid by MTN for the first slot, both telecoms operators paid a total sum of $563.1 million for the 5G licence, which they won in a competitive bid process in December 2021.

Following the successful auction of the 5G licence last year, the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, quickly announced the payment deadline of February 24, 2022 for the payment of the licence fee, as contained in the Information Memorandum (IM) for 5G licence auction.

According to the Information Memorandum, any operator who fails to meet up with the payment deadline, will not be awarded the 5G licence, and will also lose the initial bid deposit of N7.5 billion, which is the 10 per cent non-refundable deposit for the reserved bid price of $197.4 million (N75 billion), that was paid by all bidders.

But to the joy of Nigerians, both winners of the 5G licence met the payment deadline last week. Although MTN Nigeria had paid long before the deadline, Mafab Communications only paid a day to the deadline, which was February 23, 2022.

The meeting of the payment deadline has continued to elicit joy among Nigerians and Industry stakeholders, who are of the view that the payment is a clear indication that both operators are ready to rollout 5G network across Nigeria, anytime soon.

NCC’s Position

Confirming and announcing the payment from both MTN Nigeria Plc and Mafab Communications, NCC in statement signed by its Director, Public Affairs, Dr. Ikechukwu Adinde, said: “Provisional winners of the 3.5 Gigahertz (GHz) spectrum licence, MTN Communications Nigeria Plc and Mafab Communications Limited, have made their full payment of $273.6 million each for the 5G Spectrum license to the Nigerian Communications Commission. The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, officially confirmed the payment status on February 24, 2022, just as the deadline set for the two winners of the spectrum auction elapsed.

“As part of the auction process emplaced by the Commission in the Information Memorandum (IM), three companies, namely MTN Nigeria, Mafab Communications Ltd and Airtel Networks Ltd submitted bids with an initial bid deposit (IBD) of $19.74 million, representing 10 per cent of the Reserve Price of the 3.5GHz Spectrum by the close of the Bid submission date of November 29, 2021.”

The statement further said::”Following the successful auction on December 13, 2021 and the emergence of MTN and Mafab as winners, they were required to pay the balance of the bid amount of $253.86 million on or before February 24, 2022. However, aside the $273.6 million payment, MTN paid additional $15.9 million, being the bidding sum it offered at the assignment state of the spectrum auction, making it clinch its preferred Lot 1 (3500-3600Megahertz-MHz) in the 3.5Ghz spectrum; while, Mafab Communications, which bided lower at the assignment stage, consequentially settled with Lot 2 (3700-3800Mhz) at no extra cost.”

Confirming the payments by the two licensees, Danbatta said: “I wish to officially announce that NCC has received and confirmed payments from MTN and Mafab for their acquisition of 1 slot of 100Mhz each in the 3.5Ghz spectrum auction, which was successfully conducted by the Commission on December 13, 2021. They both met the deadline of February 24, 2022 as set by the Commission”.

“Arising from this and on behalf of the Minister of Communications and Digital Economy, Dr. Isa Ibrahim Pantami, the Board and Management of the NCC, I wish to congratulate the MTN and Mafab for this feat, as we look forward to accomplishing other deployment timelines in the 5G deployment roadmap, as articulated in the National Policy on 5G Networks for Nigeria’s Digital Economy,” Danbatta stated.

For meeting the payment deadline, Danbatta commended the two companies for their commitment to 5G deployment drive through their private investments, which he said, was a demonstration of the licensees’ belief in the sound regulatory environment in the Nigerian telecommunications sector.

Danbatta also expressed appreciation to the federal government for its support and commitment to the deployment of 5G technology in Nigeria which, he said, would bring substantial network improvements, including higher connection speed, mobility and capacity, as well as low-latency capabilities to communications services in Nigeria.

The Commission published a Public Notice on its decision to award two lots of 100MHz Time Division Duplex (TDD) available in the 3.5 GHz band through an auction process, to support the delivery of ubiquitous broadband services for the deployment of 5G technology in Nigeria.

Subsequently, an Information Memorandum (IM) was issued on November 10, 2021, in which Bid Applications for the available spectrum lots were invited. By the deadline for receipt of applications on November 29, 2021, the Commission received applications from three licensed telecommunications companies, namely: Airtel Networks Limited, Mafab Communications Limited, and MTN Communications Nigeria Plc.

The Auction held successfully on Monday, December 13, 2021 at the Transcorp Hilton Hotel, Abuja with the three bidders competing for the available two lots in which the Commission adopted the Ascending Clock Auction format that ended after Round 11, and proceeded to the Assignment Stage.

In the auction, MTN and Mafab emerged provisional licence winners and arising from this, the winning bid price for the auction was put at $273.6 million for each lot of 100 MHz TDD. The Provisional licence winners were then directed to pay the winning bid price less the Intention-to-Bid Deposit, by February 24, 2022.

Industry stakeholders and observers have commended the Commission for the auction process, described as efficient, fair, well-organised and transparent; as well as designed to deliver the ideal outcome which saw the strongest bidders emerge as winners, raising a substantial amount for the federal government and setting the stage for the next phase in Nigeria’s 5G roadmap.

Stakeholders’ Position

Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said 5G licence and 5G network deployment would mean a lot of cash inflow into the Nigerian economy, which goes to show that telecoms is the major driver of the Nigerian economy. “5G will create a lot of prospects for the Nigerian economy. There was clear transparency in the auction process, which will continue to attract foreign investors to do business in Nigeria, thereby opening the Nigerian economy to foreign transactions,” Adebayo said.

According to him, “With the planned rollout of 5G network across Nigeria,
e-Commerce, e-Government, and Application of IoTs, Machine to Machine Communications and Machine to Human Communications, should be the focus for 2022.

Adebayo said the 5G network rollout would open vista of opportunities for Nigerians and would also enhance digital transformation across the country in several ways. “The 3.5GHz spectrum will pave way for speedy deployment of 5G network, and once we have systems and applications running on the spectrum at high speed data, there will be faster integration of systems and there will be increased access with machine-to-machine connection that will also drive financial inclusion. What we used to download in minutes before, will now be in milliseconds and there will be improved customer experience to speed, access and connectivity. It will enhance e-Commerce, e-Health, e-Government, among others, with great improvement on national security,” Adebayo said.

Adebayo also said those operators that would deploy 5G technology, would likely change the dynamics in the telecoms sector and the Nigerian economy at large, because they would be introducing new applications that would run faster on 5G network, and improve customer experience.

Adebayo commended NCC for a transparent auction exercise as well as the operators who bided for the auction.
President of the Association of Telecoms Companies of Nigeria (ATCON), Ikechukwu Nnamani, said the deployment of 5G services in Nigeria would enhance the Nigeria’s digital economy drive with all the attendant benefits including employment creation, which he said, would be good for the country.

According to Nnamani, “The successful auction of 3.5GHz spectrum will facilitate 5G deployment that will promote digital transformation and financial inclusion. Services will be extended to areas that are currently underserved and more efficient ways to deliver services to the subscribers will be in place. We also expect better quality of service as new infrastructure is implemented.

“There is immediate revenue from the payment for the spectrum. There is also new investment for the infrastructure that will be built. This is expected to bring foreign direct investment to the country, and all aspects of the economy will improve financially.”

How Winners Emerged

At the beginning of the main auction process, which held on Monday December 13, NCC adopted the Ascending Clock format in auctioning the 3.5GHz spectrum licence, which allows the auction manager to continuously increase the bid price within a certain per cent threshold, as the bidding progresses from one round to another.

Before the bidding commenced, the Auction Manager, who is the Director of Spectrum Administration at NCC, Mr. Oluwatoyin Asaju, assigned each of the three bidders, MTN Nigeria Plc, Airtel Networks Ltd and Mafab Communications Limited, to their bidding rooms, and accredited one representative from each of the bidding operators as monitoring agent.
MTN Nigeria Plc was assigned bidding room two and monitoring room three, Airtel Networks
Ltd was assigned bidding room three and monitoring room one, while Mafab Communications Limited was assigned to bidding room one and monitoring room two.

For transparency, the bidding process was transmitted real time to two broad screens located at a general location inside Transcorp Hotel, where observers, including journalists, were seated.

According to Asaju, the first round of bidding was mandatory for all the three bidders and each bidder was at liberty to exit bidding at any of the bidding rounds. The initial rounds were allotted 20 minutes as duration period for each round.

Although NCC had placed the reserve bidding price for the 3.5 GHz Spectrum at $197.4 million, the Auction Manager however commenced round one bidding process at a reseve price of $199,374,000 and all three contenders agreed with the new reseve price.

At the end of round one, the Auction Manager increased the reserve price to $201,367,740 for the commencement of round two. At the end of round two, the Auction Manager, again, increased the bid price to $204, 288,256.1 for the commencement of round three.

At the end of round three, the bid price for one lot of the 3.5GHz spectrum was increased to $209,497,962.5 for the commencement of round four. Round five commenced with a bid price of $215,782,901.38
Round six of the auction began with $224, 414,217.43 bid price per lot, and all the three eligible bidders were still in the competition.

From round seven upwards, the bidding time was reduced from 20 minutes to 10 minutes. The round seven commenced with $231,146,643.96 bid price per lot, while round eight commenced with $240,392,509.71 bid price per lot, with all the three eligible bidders were still in the competition.

Round nine commenced with all three eligible bidders with a bid price of $251,210,172.65. Round 10 commenced with all three bidders with a bid price of $263,017,050.77, while round eleven also commenced with all three bidders with a bid price of $275,904,886.25. The main stage auction eventually ended at about 7.22pm with round eleven, with a final winning bid price of $273,600,000 ($273.6 million), after Airtel exited, leaving only two bidders in the race.

Benefits of 5G Network Rollout

Speaking about the benefits of 5G rollout, while presenting a lead paper at the official hand over of Spectrum Allocation for 5G deployment to the NCC in Abuja recently, the former Secretary General of the Commonwealth Telecommunications Organisation (CTO) and CEO of Tetconsult, UK and Nigeria, Mr. Shola Taylor said: “5G is a reality and the impact on our lives is real and the benefits are endless. Nigeria is already in it. We have started well and must be prepared for the disruption that will come in spite of the challenges. We cannot go back. We cannot remain where we are so the only option is to move forward and move quickly.”

He therefore tasked the federal government to ensure a hitch-free rollout of 5G technology across Nigeria, after the payment and issuance of spectrum licence must have been concluded by the NCC.

Highlighting the benefits of 5G technology, Taylor said the ability of 5G to offer lower latency, higher capacity, and increased bandwidth, had made it attractive and revolutionary for national development.

He said the 5G features would enable an endless set of possibilities and benefits for Nigeria – for the individuals, for government and businesses.

According to him, “In the health sector, data, especially real time data is key to preventive and curative health care. It is common, for example to transit magnetic resonance imaging (MRI) scans for specialist examination. In our environment and with the current network limitations, this may take an unusually long time. A more secure and reliable 5G network, which will take much less time will obviously improve healthcare delivery.”

He said 5G would also help in the monitoring of consumer products that are transported everywhere all the time with all kinds of delivery mechanisms. “Quality assurance is key. The quality of consumer products meant for end users would be better monitored and assured through the deployment of 5G networks across delivery trucks transporting a consumer product. Some of the IoT sensors on the trucks can send data on certain features such as temperature variations that often lead to product contamination,” Taylor said.

In the area of national security, Taylor added that the improved data speeds and lower latency of 5G technologies would be of immense benefit to security forces as the technology would enhance standard operational activities – Command and Control (C2), logistics, maintenance, Artificial Intelligence (AI), augmented and virtual reality.

In the transport sector, Taylor said autonomous vehicles were gradually becoming a reality. “Although for us, this may be on the horizon, we stand to benefit initially from the use of 5G to achieve better traffic control through installation of traffic lights that change their patterns based on traffic flow in such heavily congested areas like Lagos to improve what we usually call Go Slow,” Taylor said.

He explained that the broadcast sector would benefit immensely from 5G, especially how events and programmes are captured, produced and transmitted to people around the world. He added that the finance sector would also benefit from 5G, as stockbrokers and other traders would have information on developments in the market much faster than achievable with 4G networks.

Initial Fears about 5G

Before now, Nigerians had raised fears about the perceived health implications of 5G rollout, alleging that electromagnetic emissions from telecoms masts and 5G cables, could cause serious health hazards to humans.

NCC and industry stakeholders have however repeatedly allayed such fears, insisting that sciences and the World Health Organisation (WHO), have not raised any concerns about health risks associated with 5G network rollout.

Chairman of the Association of Licenced Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, in one of his position papers on 5G technology, said: “The 5G technology we are talking about, and which has been explained before to all Nigerians, is a new layer of technology, built on top of fourth generation technology, known as 4G technology. So there is really nothing new in terms of the perceived fears concerning public health and safety, because it has been proven over and over again by international and local studies that there are no known health risks associated with 5G rollout.”

NCC has had the test trial of 5G launch in Nigerian with one major telecoms operator, and since the trial test in 2019, there had been no reported cases of public health hazards linked to 5G rollout, Adebayo further said.