Bolstered by its success of superintending the mock version Friday, independent telecommunications referee, the Nigerian Communications Commission(NCC), is set to re-enact its track record at auctioning critical spectra, for effective and efficient telecommunications services provisioning in Nigeria, as the actual Auction for the 3.5GHz spectrum for the deployment of Fifth Generation (5G) technology in the country holds today at the Transcorp Hilton Hotel, Abuja, north central Nigeria.
The Reserve Price remains US$ 197.4 million(N75billion) and each of the three telcos has paid US$19,740,000.000 representing 10 per cent of the reserve price.
Expectedly, MTN Nigeria, Mafab Communications Ltd and Airtel Networks Ltd, are slugging it out in the exercise that the managers have promised would be credible, fair and transparent. The Commission has said it is adopting the Ascending Clock Auction System as it promised in the information memorandum (IM) which defines the process for the licensing of the 3.5 GHz spectrum band, earlier published on the Commission’s website at the inception of the auction process.
So far, everything appears to be going well according to the plan by the regulator and, all things being equal, two successful bidders are expected to smile home with two lots of 100MHz each in the 3.5GHz band. However, there will be one loser. But there is hope for the loser to try again, as the “Commission will maintain the Auction Price of the 3.5GHz auction as a minimum to be applied when the remaining slots are available and cleared of encumbrances.” The process of clearing these encumbrances is estimated to take a minimum of twenty four months, according to the NCC.
Globally, the auction is the preferred model by regulators to determine the deserved winners of spectra. It is instructive that the Commission is committed to adopting the same pattern of transparency that greeted the GSM auction that took place on Januarys 19, 2001, in the 3.5GHz auction. Ditto for the 2.3 GHz for LTE services.
As argued by the GSMA, “Auctions have become the dominant mobile spectrum assignment mechanism over the past three decades. They were designed to provide a transparent, impartial and legally robust means of assigning spectrum to those who will use it most efficiently to support competitive, high quality mobile services. Alternative approaches like administrative awards and lotteries have generally proved less able to assign spectrum in an efficient, impartial and legally robust way.”
However, we are persuaded by the argument put forward by GSMA that “the benefits of auctions can be lost when they are not properly planned. Some have failed to assign spectrum despite it being in demand, while others have been contested for artificially inflating prices, which risk harm to consumers. Some have led to claims they are biased in favour of some operators, or for not preventing strategic behaviour, leading to inefficient spectrum distribution. A key concern in recent awards surrounds a lack of spectrum being auctioned as this leads to slower mobile broadband services and can inflate spectrum prices.”
So far, all stakeholders, from our reading, have done a relatively excellent job before now and this can only be consolidated if the auction exercise is allowed to be free, fair and transparent. As is akin to a soccer match, the outcome can only be free, fair and transparent when the major stakeholders listing the referee, the players, the officials and the fans, among others, play by the rules.
We look forward to a smooth exercise so that our journey to a true 5G experience, delayed by policy and regulatory delays and soured by conspiracy theory is not further encumbered. Yes, we can!
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