The release of strict bidding conditions for the 2.3GHz spectrum licence being offered by the Nigerian Communications Commission for the delivery of broadband wireless services is causing concerns in the industry, STANLEY OPARA writes
The release of bidding conditions for would-be investors in the 2.3GHz spectrum bid round by the Nigerian Communications Commission is creating tension among the players that are nursing the ambition to acquire the licence.
This development, our correspondent learnt from industry sources, had resulted in the interested companies going back to the drawing board to re-strategise so that they would not get disqualified by the regulator midway into the bid round.
In fact, some bidders risk being slammed with financial penalties by the NCC given their current level of preparedness for the licensing round, our correspondent learnt.
The commission said it reserved the right to impose financial penalties on the applicants/bidders if they infringed on the laid down rules.
“Financial penalties will be deducted from the Intention-to-Bid deposits provided by applicants/bidders and the commission’s decision in these matters will be final,” a clause in the rules stated.
The regulator also said it was forbidden for a bidder to have a relationship with a rival during the licensing period.
It explained, “For the purposes of this licensing process, this period starts with the issue of the Information Memorandum and stops at the granting of the licences. A relationship is defined as where a bidder owns directly or indirectly an ownership stake of 10 per cent or more in another bidder.
“In the interest of avoiding a bidder relationship conflict, applicants are required to notify the commission of any cross-investments with other licensed network operators in Nigeria of five per cent or more, and of any other information of which they are aware that could give rise to such a bidder relationship issue.”
Where it is shown that such a relationship exists, or has existed during the licensing phase, the NCC said it reserved the right to exclude such bidders from the process and withhold the IBD.
It stressed that it reserved the right to impose financial penalties and/or exclude any bidder where it had been demonstrated that the bidder had worked in an anti-competitive relationship against the spirit of the auction rules, adding that it also reserved the right to exclude such organisations from future licensing events.
It was also learnt that telecommunications operators like MainOne, Visafone Communications, MTN and Etisalat had indicated an interest in the new licences.
The winner of the single 2.3 GHz spectrum will become the sole wholesale provider of broadband services in Nigeria.
This fresh round of licensing, according to the regulator, will also give birth to seven infrastructure companies to be distributed among the seven geopolitical zones of the country, including the Federal Capital Territory, in line with the Federal Government’s proposed new National Broadband Plan.
The Chief Executive Officer of one of the infrastructure companies seeking the licence to operate in the country told our correspondent in confidence that there was the need for the NCC to revisit some of the conditions it outlined for the bidding process.
The telecoms entrepreneur, who expressed reservations about the process, said, “I have issues with some of the conditions the regulator has put forward. For instance, I don’t think it is necessary for the NCC to license InfraCos in phases. I think it will be more transparent and fair if the whole thing is done at once.”
The Executive Vice Chairman, NCC, Dr. Eugene Juwah, had reiterated at a recent stakeholders’ forum in Lagos that the InfraCos would be licensed in two phases – a phase of two sets and another of five sets.
The Acting Chief Executive Officer, Etisalat Nigeria, Mr. Matthew Willsher, has also called on the NCC to award the 2.3GHz licence to an operator with the needed scale, which will be able to stimulate market variables for growth as far as broadband usage and penetration is concerned.
Commenting on the new broadband initiative, the President, Association of Telecoms Companies of Nigeria, Mr. Lanre Ajayi, advised the NCC to carry out an impact assessment of the plan to license seven InfraCos on the existing operational miles on the industry to ensure that there was fair play.
He also advised the commission to be cautious of any policy that could exert negative influence on the industry.
Ajayi advised on the possibility of some unintended impacts of the plan on the industry.
The NCC had warned that bidders must not enter into any arrangement with organisations that would restrict the ability of other bidders to plan, build or operate their networks under the spectrum licence.
It said, “Bidders are not permitted to agree to any type of restriction on the costs of software or equipment with suppliers that would influence the ability of other bidders to plan, build or operate their networks under the spectrum licence.
“Applicants are not permitted to receive advice on the 2.3GHz spectrum auction matters from any person retained as an advisor by another bidder in the spectrum licensing process.”
The reserve price for the 30MHz of unpaired spectrum for a 10-year licence has been set at $23m, and on completion of the auction process, the NCC said it would issue a 10-year spectrum licence and Wholesale Wireless Access Service Licence.
The WWASL, according to the NCC, will attract an additional fee of N155m for the winner that does not currently hold a Unified Access Service Licence.
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