MTN Nigeria Plc and Mafab Communications Ltd have emerged the two successful winners of the 3.5 gigahertz (GHz) spectrum auction for the deployment of Fifth Generation (5G) technology to support the delivery of universal broadband services in Nigeria.
In a statement, the Director of Public Affairs at the Nigerian Communications Commission (NCC), Dr Ikechukwu Adinde, revealed that the winners emerged after 11 rounds of bidding that lasted eight hours on Monday in Abuja.
“Three companies, namely MTN, Airtel, and Mafab Communications Limited, had qualified for the auction, having met the requirements stipulated in the Information Memorandum (IM) for the spectrum auction,” he said. “The three companies had also participated in a mock auction held on Friday, December 10, 2021, which served as a precursor to the Main Auction conducted today (Monday, December 13, 2021).
“In an exercise that clearly demonstrated demand outstripping supply, with ascending clock auction system adopted by the commission, the three bidders participated in the intensely competitive auction bid.”
“In the first Round of the auction, the bid price was fixed at $199,374,000.00; $201,367,740.00 at second Round; $204,388,356.10 at third Round; $209,407,962.50 at fourth Round and $215,782,901.30 at the fifth Round.
“The auction prices increased progressively to $224,414,217.43 at the Sixth Round; $231,146,643.96 at the seventh Round; $240, 392,509.71 at the eighth Round; $251, 210,172.65 at the ninth Round; and $263,700,050.00 at the Round 10 of the auction exercise,” Adinde narrated.
According to him, the auction process reached its peak at round 11 when the bid price graduated to $275,904,886.25 with all the three bidders still actively participating.
The NCC spokesman said the main stage of the auction, however, ended at the conclusion of the 11th round, with Airtel listing an exit bid of $270,000,000, while MTN posted an exit bid of $273,000,000, giving way to the assignment stage.
At this point, Airtel had dropped off from the race having posted a lower exit bid, thus leaving Mafab and MTN as winners of the two available lots.
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NCC Executive Vice Chairman and Auction Overseer, Professor Umar Danbatta, announced the results of the auction exercise.
He noted that the commission had published a public notice on its decision to award two lots of 100 megahertz (MHz) 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 network in Nigeria.
“Subsequently, an information memorandum was issued on November 10, 2021, in which bid applications for the available spectrum lots were invited,” Danbatta said. “By the deadline for receipt of applications on November 29, 2021, the commission received applications from three licensed telecoms companies, viz: Airtel Networks Limited, Mafab Communications Limited, and MTN Communications Nigeria Limited.”
“The auction held successfully today, Monday, December 13, 2021, at the Transcorp Hilton Hotel, Abuja with the three bidders competing for the available two slots. The commission adopted the ascending clock auction format which ended after round 11 and proceeded to the assignment stage.
“It is my pleasure to announce that at the end of the auction, Mafab Communications Limited and MTN Communications Nigeria Limited emerged as provisional licence winners,” the NCC chief declared.
The winning bid price for the auction, according to Danbatta, is $273,600,000 for each lot of 100 MHz TDD and the provisional winners are expected to pay the winning bid price, less the intention-to-bid deposit by February 24, 2022.
He said the auction process was efficient, fair, credible, well-organised, and transparent and was designed to deliver the ideal outcome
The NCC chief congratulated the winners and thanked 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 the country.
Sequel to the successful auction by the two winners, he said in line with the processes outlined in the IM, the provisional winners have proceeded to the assignment stage.
“MTN Communications Nigeria Plc made an offer of $15,900,000 for the assignment of a preferred Lot, while Mafab Communications Limited made an offer of $11,120,000 for a preferred Lot,” Danbatta said.
“Thence, MTN Communications Nigeria Plc, having made the highest offer was given the right to select its most preferred Lot and it selected Lot 1 (3500-3600 MHz), while Lot 2 (3700-3800 MHz) is consequentially assigned to Mafab Communications Limited at no extra cost.”