Three to fight for 2 lots at 5G auction

Always, the Nigerian Communications Commission (NCC) would never accommodate anything that impugns one of its hard-earned intangibles – integrity at auctions. As three organizations – two giants and a dark horse – line up for what promises to be a financially bruising race, the first real test by this administration, the Commission, last week, rose in stout defence of the process against media reports that the proposed 5G auction scheduled for mid-December is going through some situations.

The date is being pushed to accommodate some documentation weaknesses on the part of applicants or even accommodate unforeseen circumstances, it was hinted.

The commencement of the licensing of 3.5GHz, the band of 5G services began with the publication of the Information Memorandum (IM) on October 6, 2021, with some other milestone activities scheduled to happen before the auction proper holding in the week commencing December 13, 2021. It was in the final stage before the auction that a section of the media spotted what tended to be an infraction. A hint at the process being meddled with in order to accommodate those who couldn’t raise the ten per cent deposit of $20m within stipulated window.

Was there any? The Commission, through the Public Affairs Director, Dr Ikechukwu Adinde told its story.

“October 7, 2021, the Commission exposed the Draft Information Memorandum (IM) on the auction of the 5G spectrum on its website (www.ncc.gov.ng) and issued a public notice in major media channels, including print, electronic and broadcast media. Comments on the draft IM were received by the Commission up until October 28, 2021; On November 3, 2021, the Commission held a stakeholders engagement forum in Lagos where comments were received from a broad spectrum of stakeholders, including the major operators, were exhaustively discussed and considered; On November 10, 2021, the Commission published the final IM, and stakeholders’ comments thereon on its website and national dailies, and set the deadline for the submission of bids on Wednesday, November 24, 2021.

“On November 23, 2021, just a day before the deadline for the submission of bids, Air Traffic Controllers went on strike, disrupting flight operations in Lagos; as a responsive regulator, and following concerns expressed by the industry stakeholders and potential bidders for the 5G spectrum, including MTN, about the possibility of meeting the deadline in light of the flight disruptions, the Commission relying on the Provision of the IM, announced the extension of the deadline from Wednesday, November 24, 2021, to Monday, November 29, 2021.”

There is one small information in the IM which the Commission based its action upon. It states as follows: “The Commission reserves the right to make necessary and reasonable adjustments to the process in the overall interests of achieving a fair and transparent outcome.”

Although the foregoing is associated more with the auction proper but it can as well be argued that it covers the entire process.

Having made the above observation, it is important to point out that the Commission took pains to explain the various actions it has taken to ensure the 5G auction is sure-footed in order to validate its claim to transparency which it earned since the GSM auctions in 2001. That was the year the Engr. Ernest Ndukwe-led NCC forced the world to believe that something earth-shaking can emerge from a nation just struggling out of the vestiges of military dictatorship.

Although there has been some level of observed attenuation at the Commission, more because of regulatory capture from higher quarters, its claim to regulatory transparency at the auctions can hardly be faulted. However, the Commission should understand that it is the responsibility of the media to interrogate important projects like the auction in order to put the agencies in charge on their toes.

Without doubt, this is a huge project. The NCC is offering only 2 Lots of 100MHz each in the 3.5GHz band, ranging from 3500 – 3600 and 3700 to 3800 for the auction. The Generic Reserve Price (GR) is US$197, 400, 000. For an organization to have a room at the auction, it must successfully submit its forms with an Intention-to-Bid Deposit (IBD), which is ten per cent of the GR. That was adjusted to $20m.

By December 1, 2021, the Commission announced that by the close of work of November 29, 2021, three companies had successfully submitted their applications, including the IBD of US$20m. The companies are: MTN Nigeria, Mafab Communications Limited and Airtel Networks Limited. The Commission wasn’t happy however, that Mafab was referred to as relatively unknown; after all it is a licensee.

I am sure as the breaking of day tomorrow that not even Mafab will dispute such a-not-too savoury appellation. Information available on its website says that Mafab was incorporated only on July 8, 2020, to operate Interconnect Exchange and International Data Access.

One may even be petulant to observe that not too much of business happened last year because of COVID-19. But just over a year later the organization is in a position to shell out an IBD of US$20m, and if we still hold strongly to the biblical allegory of a David taking down Goliath, we could as well see a rookie operation pay over US$200m for a 5G license. Obviously people will be very interested in the company and even in the names behind it, even if it is just to put garlands around their neck. So, more questions will still come, unfortunately.

However, NCC should be reassured that Nigerians are looking forward to 5G licensing with lots of optimism as the communications industry gets complicated daily with bad services. So much of magic has been attributed to 5G. Nigerians are looking forward to sharing a little bit of the magic.

But there is a little landmine, a little freaky bubble that could burst into unpleasantness and inevitable failure. A cross-reference at the licensing of the Payment Service Bank (PSB) by the Central Bank of Nigeria (CBN) could provide all the wisdom. Initial licensing was done using wishful reasoning as reality, until it took a redemptive action recently by doing another licensing round.

The NCC doesn’t have to go the ignoble way of the CBN. The 3.5 GHz Information Memorandum (IM) promised transparency of the auction process. That is what should be served a people still hungry for a good streak from this government.