MTN, MainOne, Visafone, Etisalat, Scramble For New Licenses
Telecommunications firms, including MainOne Cables, Visafone Communications Limited, MTN Nigeria, Emerging Market Telecommunications firm, Etisalat are set to do battle for new licenses made available by the Nigerian Communications Commission (NCC) which is targeted at improving the country’s broadband landscape.
Already, the Federal Government has indicated its interest to increase broadband penetration, which is currently six per cent to 30 per cent, about five-fold increase in the next four years.
By so doing, NCC has said that it will license the remaining 2.3GHz spectrum band and seven infrastructure companies (InfraCos) in 2014.
The Federal Government, through the NCC had set a minimum offer price of N3.6 billion on a license for the sole provider of wholesale broadband services in Nigeria, which is expected to be sold next year in a fresh round of spectrum auctions.
Indeed, a reserve price, which represents the minimum amount an item is on offer in an auction, has been fixed at N3,673,100,000 ($32million) for the 30MHz of 2.3Ghz frequency spectrum sale scheduled to be concluded by Q1 2014. The winner of the single 2.3GHz spectrum will become the sole wholesale provider of broadband services to other service providers in Nigeria.
The time table released by the commission showed that NCC set March 14, 2014 as the deadline for the conclusion of the process of 2.3GHz frequency licensing, while that of the seven InfraCos should be completed by December.
According to the NCC, a mock auction for the 2.3GHz would hold on February 18, while the main auction would hold between February 19 and 20.
The eventual winner of the frequency is expected to pay for it on March 13, while the publication of the final result on March 14 will mark the end of the process, which started with the publication of Intention to Auction/Request for Expression of Interest on November 15, 2013. The winner of the frequency will become a wholesale national broadband provider.
At a telecoms forum in Lagos, the Executive Vice Chairman of NCC, Dr. Eugene Juwah had said that the Information Memorandum (IM) for the race was billed to be released in no distant time.
Juwah had noted that this fresh round of licensing would also give birth to seven regionally based InfraCos, in line with its proposed new broadband market structure.
According to NCC, “This broadband market structure will ensure vibrancy in the market and prevent dominance, as no company will be allowed to play in more than two of the service layers and the equity participation in bidding consortium for the licenses will be controlled.”
The InfraCos, according to the NCC are firms that will assist in the deployment of critical ICT infrastructures in all the six-geopolitical zones in the country towards accelerating broadband services deployment.
By virtue of NCC’s new broadband market structure, which seeks to achieve the objective of a nationwide metropolitan and backbone fibre deployment on an open access, non-discriminatory, price regulated basis, the wholesale wireless provider will interconnect with the InfraCos at their Points of Access (PoA). This, the commission said would create an integrated broadband service nationwide to home, hospitals, public and private institutions as well as businesses.
A copy of the IM obtained by Technology Times revealed that interested bidders are expected to pay the sum of N367, 310,000 ($2.3m), which represents 10 per cent of the reserve price for the licence and also the Intention to Bid Document (IBD), the deposit payment required to be made by all Applicants as part of the pre-qualification process, the rule stated.
“The IBD is a commitment from the Applicant to pay at least the Reserve Price for the license, as specified in this IM, and to participate in the Auction process”, NCC said adding that the cleared funds must have reached the designated transaction account with the Central Bank of Nigeria (CBN) not later than 17.00 hours (NT) on February 7th, 2014. The planned auctions will be an all comers affair as companies that are duly registered in Nigeria can participate once they can shell out the stipulated funds and meet other pre-qualification requirements. On the other hand, even though existing telecoms companies are not excluded from the auctions, they are expected to scale stiffer pre-qualification conditions.
“Already licensed operators participating in the process must fulfill all existing obligations to the Commission including payments of Annual Operational Levy, Spectrum and National Numbering Plan fees prior to prequalification”, according to the telecoms umpire. NCC is issuing the last 2.3GHz in the upcoming bids as three other companies have hitherto been awarded similar spectrum to deliver Internet service to end users, the auction plans states.
“There are three operators providing data services on the 2.3GHz band. The operators are Spectranet, Direct on PC (DoPC) and Mobitel. They currently operate with a 20MHz bandwidth. These licenses were awarded in 2009 except for DoPC that was awarded in 2006″, the regulator said underscoring that despite these, the Nigerian broadband market stakes remain attractive for a new wholesale service provider.