All Eyes on NCC as 2.6GHz Spectrum Auction Looms

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Nigerians are full of expectations as they await the planned auction of the country’s 2.6 GHz spectrum by the Nigerian Communications Commission next week, writes Emma Okonji

In the last six months, the Nigerian Communications Commission (NCC) has been making preparations for the successful auctioning of the 2.6GHz spectrum, having failed twice in the past.
However, it appears all is set for the exercise, which is scheduled to hold in Abuja next week from May 16 to 19, 2016. The process will begin from preliminary auction to the final auction.

Although NCC has refused to disclose the number of operators that have indicated interest to bid for the 2.6GHz spectrum licence, there are strong indications that majority of the operators must have declared their interests, given the importance of the spectrum for broadband deployment on the 4G LTE technology network, which is the next generation network.

Importance of 2.6GHz spectrum
According to NCC, the planned auction of the 2.6GHz spectrum licence would enhance the availability of spectrum for speedy deployment of broadband services across the country.
The commission said the spectrum would also create opportunity for the deployment of advanced wireless 4G Long Term Evolution (LTE) technology services, as well as improve standardisation and harmonisation of telecoms operations.
Director, Spectrum Administration at NCC, Mr. Austin Nwaulune, who made the disclosure during an interactive session with journalists in Lagos recently, said the importance of the 2.6 GHz spectrum to broadband development and penetration, compelled the NCC to release an Information Memorandum (IM) on the auction of the spectrum.
The 2.6 GHz band, which spans 2.5 GHz band to 2.7 GHz band, is generally considered to cover the frequency range between 2500-2690 MHz, although there are some minor national variations among countries in the use of the frequency band.
The 2.6 GHz band is often referred to as the ―IMT-2000 expansion band II and is sometimes called the 3G expansion band.

The planned process
According to Nwaulune, the licence is for 10 years and the auction will be carried out in an ascending clock auction.
The auction process commenced with the publication of the resumption of the 2.6GHz frequency spectrum auction notice on February 25, 2016, which was followed by a period for the submission of questions to the commission, relating directly to the licensing process defined in the information memorandum, and the period elapsed in April 16. By April 29, the application was closed to all operators, to give room for the auction committee to scrutinise the applications and inform those that will qualify for the bidding exercise. The actual bidding, which commences with preliminary auction exercise, will begin next week from May 16 to 19. By June 10, 2016, spectrum winners must have made full payment for the licence won, and by June 13, 2016, the NCC will announce the winners that complied with full payment directive.

The spectrum is considered to be a valuable national resource for which commercial opportunities exist.
Stating the pre-qualification process to participate for the 2.6GHz bid, Nwaulune said applicants would not have to be licensed network operators in Nigeria, but must be registered with the Corporate Affairs Commission (CAC).

The applicant must transfer an Intention-to-Bid Deposit (IBD), which is 10 per cent of the total amount for the number of lots the bidder intends to acquire from among the available 14 lots that the NCC is auctioning. For instance, the reserve price for each lot of the 2.6GHz spectrum is $16 million and if an operator indicates to acquire six lots, the operator will pay 10 per cent of the total $96 million for the six lots, which is $9.6 million, as part of the pre-qualification process.

Also, the bidders must not have any relationship among themselves during the biding exercise and a relationship is established when a bidder has directly or indirectly, an ownership stake of 10 per cent or more in another bidder. The spectrum will be offered on a technology neutral basis and shall be used for national rollout.
Time lag for rollout for those that will emerge winners, is put at one year and any operator that fails to rollout within the one year time frame, will automatically lose the licence.

Stakeholders’ expectations
Most Nigerians, especially telecoms industry stakeholders, have continued to commend the management of NCC for its resilience to auction the 2.6GHz spectrum, despite failing twice in the past.
They are specifically happy that the 2.6GHz spectrum licence would create headroom for the availability of enough spectrum for the deployment of broadband services and infrastructure across the country.
Worried about the poor state of broadband penetration in the country, which is currently put at 10 per cent, the President of the Association of Telecoms Companies of Nigeria (ATCON), LanreAjayi, commended the NCC for its renewed efforts to licence the 2.6GHz spectrum, which he said, would boost broadband deployment and penetration in the country.

Ajayi, who commended NCC for the level of professionalism and transparency exhibited so far in the planned process of the 2.6GHz spectrum auction, also advised the commission to ensure that it concludes the process as planned, to enable Nigerians who are in need of broadband services, to enjoy the full benefits of broadband.

A subscriber to Globacom and a civil servant with the Lagos State Ministry of Education, Mr. Joseph Ibe, also commended NCC for the planned auction of the 2.6GHz spectrum. He explained that the move would not only increase the availability of spectrum for broadband deployment, but would also reduce the high cost of bandwidth in the country. He explained that the cost of data bundle in Nigeria across networks is still on the high side and expressed confidence that the 2.6GHz plectrum auction would drive down cost of broadband bandwidth, when it is able to create additional broadband capacities for the country.
“We hope that NCC will get it right this time by successfully licensing operators on the 2.6GHz spectrum band,” Ibe said.

2.6 GHz spectrum in other countries

Licences on 2.6GHz have been issued in several countries to date, notably Norway, Sweden, Finland, Singapore, Hong Kong, the United States, United Kingdom, Ghana. More 2.6 GHz auctions are anticipated over the next one to two years in multiple national markets.
Research has shown that 108 networks globally have launched the 2.6GHz, at national and regional levels, depending on country’s needs and rollout criteria.

More auctions are expected in Europe as well as in major emerging markets such as Brazil and South Africa.
Nigeria, no doubt, will soon join other countries that have licensed the 2.6GHz frequency spectrum by next week, to enable her citizens enjoy the many benefits of the spectrum if the planned auction is successful.

Other planned spectrum licences

Apart from the planned auction of 2.6GHz spectrum licence, the NCC is also planning to auction other spectrum licences that will facilitate faster broadband deployment across the country. They include the expansion of the existing 23GHz spectrum licence from its current 7MHz to 28MHz from May 30th, 2017, and the fresh licensing of 38GHz and 42GHz spectrum bands.

The fresh spectrum licenses, according to NCC, would provide the much needed spectrum that operators would need to address the increasing demand for broadband services in the country.

Speaking on the importance of licensing additional spectrums in the country, the Executive Vice Chairman of NCC, Prof. Umar Danbatta, said: “The emerging trend in the telecoms sector in Nigeria today, is broadband, which will certainly require massive deployments in terms of critical infrastructure, if the country is to achieve the set target of government of 30 per cent broadband penetration by 2018. The growth of broadband traffic is on the increase and therefore, additional spectrum resources would be required to avoid network challenges.”