It took eight hours and 11 rounds of bidding for little known Mafab Communications Ltd and MTN Nigeria Plc, to emerge as the two successful winners of the 3.5GHz Spectrum Auction for the eventual deployment of the Fifth Generation (5G) technology in Nigeria.
The two winners beat Airtel, a well-known giant in Nigeria’s telecom space to claim the highly coveted Spectrum license at a well-attended event held at the Transcorp Hilton Hotel, Abuja on Monday, December 13, 2021.
Mafab Communications Ltd and MTN Nigeria Plc emerged winners in a keenly contested 3.5GHz Spectrum auction conducted by the Nigerian Communications Commission (NCC), in collaboration with the Federal Ministry of Communications and Digital Economy.
Recall that MTN Nigeria, Airtel and Mafab Communications Limited, had qualified for the auction, having met the requirements stipulated in the Information Memorandum (IM) for the spectrum auction.
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 on Monday, December 13, 2021.
During the auctioning exercise, the Commission adopted the Ascending Clock Auction System which allowed the three bidders to participate freely in the intensely competitive auction bid.
The first round of the auction had the bid price fixed at $199,374,000.00; the second round at $201,367,740.00; the third round stood at $204,388,356.10; the fourth stood at $209,407,962.50 while the fifth round ended at $215,782,901.30.
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.
The auction process reached its peak at round 11 when the bid price graduated to $270,000,000, and MTN Nigeria posted an exit bid of $273,000,000, giving way to the Assignment Stage.
It was at this stage that Airtel had dropped off from the race having posted a lower exit bid, leaving Mafab Communications and MTN Nigeria as winners of the two available lots.
Executive Vice Chairman of NCC and the Auction Overseer, Prof. Umar Garba Danbatta, in announcing the results of the Auction, recalled the processes and activities leading to the successful conduct of the auction.
He said the NCC 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. 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 was 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 license winners,” he said.
Danbatta said that as a result of this, the winning bid price for the auction 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 congratulated the winners and thanked the Federal Government for its support and commitment to the deployment of 5G technology in Nigeria, which, he said holds great benefits including higher connection speed, mobility and capacity as well as low-latency capabilities to communications services in Nigeria.
The NCC boss noted that sequel to the successful auction by the two winners, and 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.
“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,” Danbatta said.
Minister of Communications and Digital Economy, who doubles as the Chief Host, Prof. Isa Ali Ibrahim (Pantami), had in his speech earlier, emphasized the Federal Government’s commitment to driving the digital economy, and commended the Commission for its efforts towards implementing the 5G deployment plan for the country.
Chairman, Board of Commissioners, NCC, Prof. Adeolu Akande, said that spectrum plays a strategic role in meeting the insatiable demand for advanced mobile data services as well as a new wave of wireless broadband such as remote object manipulation, industrial automation, virtual and augmented reality and next-generation connectivity for vehicles.
While noting that the use cases will continue to increase the impact that mobile services have on societies and economies, Akande commended the Minister for his unflinching support, the Board of Commissioners, Management and staff of the NCC for the role they played in making the auction a successful one.
He also thanked the bidders for believing in the Nigerian communications sector by their willingness to invest millions of dollars in the sector for the provision of 5G services.
He reiterated the Commission’s commitment to transparency and openness, which the auction represents.
