Investors doubt progress on 2.6GHz spectrum auction

Prospective investors and key industry players seeking  critical roles in Nigeria’s growing broadband market are in doubt of the progress of the  2.6 Gigerhertz (GHz)spectrum auction  scheduled to hold in a few weeks.

This is because previous efforts to sell the same spectrum have failed.

The frequency which is key to actualising Nigeria’s National Broadband plan target of 30 percent penetration by 2018, as it is a capacity spectrum will do the country a lot of benefit if it is auctioned on the proposed date.

Austine Nwaulune, Director, Spectrum Administration, NCC said that the 2.6GHz frequency is very essential as “108 countries around the world have rolled out Long Term Evolution (LTE) on this frequency.”

Nwaulune explained that the spectrum was offered to the commission on a technology neutral basis, adding that it could be used to provide any telecommunication service, including facilitating the roll out of broadband.

“I have heard that some people are saying that the government is auctioning this spectrum frequency to make money but the main objective, as written on the NCC website, is to meet the demand for additional spectrum by operators and to help them achieve 4G.

In 2014, the Nigerian Communications Commission (NCC) announced the sale of the 2.6GHz spectrum and the auction was to take place in December 2014. However, a month before the auction date, the Federal Government said it was postponing the sale of the spectrum till a more suitable date.

Again, in March 2015, the NCC postponed the auctioning of this same spectrum for the second time till further notice. This further frustrated the plans of prospective bidders who were looking forward to deepening broadband penetration in the country.

Following the announcement of  government’s plan to finally auction the spectrum on May 17-19, 2016 to make a minimum of $224 million in the sale of the spectrum frequency which would be auctioned at minimum price of $16 million per lot of 2X5MHz of which 14 Lots are up for auction, industry watchers say there may be reluctance in the interest of investors whose business plans had been thwarted due to the previous postponement.

Lanre Ajayi, National President, Association of Telecommunications Companies of Nigeria (ATCON) said “the association is disturbed that the NCC has not been able to assign spectrum to operators for a long time and past attempts to assign the 2.6GHz have failed.

“We would like to see a better management regime of the Nigeria frequency spectrum. We expect the National Frequency Management Board (NFMB) to proactively discharge its responsibility,” he added.

Speaking at an interactive session with journalists recently, Nwaulune said the end date for submission of application, payment of mandatory intention to bid deposit for all intending bidders was on April 29, 2016.

However, the commission does not know how many companies have submitted applications intending to bid for the available spectrum.

“The commission is not able to say how many people have paid their intention to bid or how many companies are interested because we have not looked at all applications yet. On the mock auction date, which is on May 16, we will find out how many companies are qualified to take part in the bidding process,” he said.

Industry analysts say there is hesitance amongst the major telecommunications and IT companies in Nigeria, on account of previous failed efforts, as well as the high foreign exchange rate and scarcity.

This, they say, may be the reason why the Federal Government has decided to open up bidding to foreign players.

“We have made bidding open to everyone, including foreign operators, as long as they register with the Corporate Affairs Commission (CAC).

“This was done so that many players will be involved and the industry can blossom, thereby developing our economy so that the local companies can have a robust space to play,” he said.

Companies like Zinox Technologies, MTN, Globacom and others who had previously bidded for spectrum auctioned by the commission are keeping quiet about their intentions this time.

“The company is currently not able to disclose whether it is bidding this year or not. Many companies are keeping their opinions or intentions under wraps. You would have to wait until that day, to know who is interested and who will win,” Gideon Ayogu, Head, Corporate Communications, Zinox Technologies, told BusinessDay over the phone.

Jumoke Akiyode