MTN Communications Nigeria Plc and Mafab Communications Limited, the provisional winners of the 3.5 GHz spectrum license, have paid the Nigerian Communications Commission a total of $273.6 million for the 5G spectrum license.
Prof. Umar Danbatta, Executive Vice Chairman of the Nigerian Communications Commission (NCC), announced the payment status today, February 24, 2022, just as the deadline for the two winners of the spectrum auction had passed.
Three companies, MTN Nigeria, Mafab Communications Ltd, and Airtel Networks Ltd, submitted bids with an initial bid deposit (IBD) of $19.74 million, representing 10% of the Reserve Price of the 3.5GHz Spectrum by the close of the Bid submission date of November 29, 2021, as part of the auction process established by the Commission in the Information Memorandum (IM).
MTN and Mafab were needed to pay the balance of the bid sum of $253.86 million on or before February 24, 2022, following the successful auction on December 13, 2021, and their selection as winners.
Apart from the $273.6 million payment, MTN also paid an additional $15.9 million, which was the bidding sum it offered at the assignment stage of the spectrum auction, allowing it to secure its preferred Lot 1 (3500-3600 Megahertz-MHz) in the 3.5Ghz spectrum; while Mafab Communications, which bid lower at the assignment stage, was forced to settle for Lot 2 (3700-3800Mhz) at no additional cost.
“I wish to officially announce that NCC has received and confirmed payments from MTN and Mafab for their acquisition of 1 slot of 100Mhz each in the 3.5Ghz spectrum auction, which was successfully conducted by the Commission on December 13, 2021,” Danbatta said, confirming the payments by the two licensees. Both of them met the Commission’s deadline on February 24, 2022.”
“As a result of this, on behalf of the Honourable Minister of Communications and Digital Economy, the NCC Board and Management, I would like to congratulate MTN and Mafab on this achievement, as we look forward to completing other deployment timelines in the 5G deployment roadmap, as articulated in the National Policy on 5G Networks for Nigeria’s Digital Economy,” Danbatta
For meeting the payment deadline, Danbatta has commended the two companies for their commitment to 5G deployment drive through their private investments, which he said, was a demonstration of the licensees’ belief in the sound regulatory environment in the Nigerian telecommunications sector.
Danbatta also expressed appreciation to the Federal Government for its support and commitment to the deployment of 5G technology in Nigeria which, he said, will bring substantial network improvements, including higher connection speed, mobility and capacity, as well as low-latency capabilities to communications services in Nigeria.
The Commission issued a public notice announcing its decision to auction two lots of 100MHz Time Division Duplex (TDD) available in the 3.5 GHz band to facilitate the supply of ubiquitous internet services in Nigeria for the implementation of 5G technology.
Following that, on November 10, 2021, an Information Memorandum (IM) was released, inviting Bid Applications for the remaining spectrum lots. Three licensed telecommunications firms, namely Airtel Networks Limited, Mafab Communications Limited, and MTN Communications Nigeria Plc, submitted proposals by the deadline of November 29, 2021.
The Auction took place on Monday, December 13, 2021 at the Transcorp Hilton Hotel in Abuja, with three bidders competing for the two available lots. The Commission used an Ascending Clock Auction format, which ended after Round 11 and proceeded to the Assignment Stage.
MTN and Mafab were provisional license winners in the auction, and the winning bid price for each lot of 100 MHz TDD was set at $273.6 million. The Provisional license winners were then told that they had until February 24, 2022 to pay the Winning Bid Price less the Intention-to-Bid Deposit.
Industry stakeholders and observers praised the Commission for the auction process, which they described as efficient, fair, well-organized, and transparent, as well as designed to deliver the ideal outcome, with the strongest bidders emerging as winners, raising a significant sum for the Federal Government and paving the way for the next phase of Nigeria’s 5G roadmap.