The federal government through the Nigerian Communications Commission (NCC) has opened bids for the auction of one wholesale frequency spectrum licence in the 2.3 GHz band with a minimum offer price of N3.6billion ($23million).
The auction, which is expected to be concluded next year, will produce the sole provider of wholesale broadband services in Nigeria, meaning that the winner of the single 2.3 GHz spectrum on offer would become the sole seller of broadband services to other service providers in the Nigerian market.
This auction process, therefore, underscores the plans by the industry regulator to foster penetration of high speed Internet services across the country. The licence on offer, in the upcoming bids, is the last 2.3GHz as three other companies had hitherto been awarded similar spectrum to deliver Internet services only to end users.
The Information Memorandum on the auction published by the NCC and obtained from Technology Times indicated that interested bidders would be expected to pay the sum of N367, 310,000 ($2.3million), representing 10 per cent of the reserve price for the licence.
The amount also covers the Intention to Bid Document (IBD), the deposit payment required to be made by all applicants as part of the pre-qualification process. A reserve price represents the minimum amount on an item on offer in an auction, while the IBD is a commitment from applicants to pay at least the reserve price for the licence "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 such payment (cleared funds) should reach the designated transaction account with the Central Bank of Nigeria (CBN) not later than 17.00 hours (NT) on February 7, 2014.
The Executive Vice-Chairman of the (NCC), Eugene Juwah, had revealed in a telecoms forum in Lagos recently, that the Information Memorandum for the race was billed to be released in a "few days."
The planned auctions would be an all comers affair as companies that were duly registered in Nigeria could participate once they could shell out the stipulated funds and meet other pre-qualification requirements.
THISDAY gathered that though existing telecoms companies were not excluded from the auctions, they were 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 pre-qualification," said the telecoms umpire.
"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 licences 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," it said further.