Airtel Africa’s request to get a 3.5GHz spectrum slot for $273.6 million has been denied by the Nigerian Communications Commission (NCC).
For context, the NCC had set the reserve price for the most recent 5G spectrum auction at $197.4 million. This price is the lowest that the commission a seller would be willing to accept from a buyer.
The amount the regulator sold to MTN and Mafab Communications Ltd. at the 5G auction in November 2021 was then raised to $273.6 million.
Airtel Africa has since argued that taking part in the 2021 auction gives it some sort of first right of refusal, and has requested that the NCC provide them the licence by administrative assignment rather than holding an auction.
The NCC pointed out that even while the request was legitimate, the procedure had already been set, and the spectrum would only be distributed by auction.
Additionally, it claimed that the licencing procedure was previously outlined in Section 124 of the Nigerian Communications Act.
“Our reserve price was set after necessary benchmarking. We arrived at some idea of what the price should be,” said Ubale Maska, Executive Commissioner of Technical Services at NCC.
“The auction determined what the actual price should be. If we have only one party interested, that will determine the price. If the reserve price throws up a higher price, that new price becomes the new price,” Maska said.
A backdrop of Airtel auction price
Remember that Mafab Communications and MTN Nigeria outbid Airtel’s final price of $270 million to bid $273.60 million to win the 2021 5G auction over Airtel
Segun Ogunsanya, CEO of Airtel Africa, said that the telecom company withdrew from that offer in order to track the market and investigate reasonably priced 5G services to suit the broadband needs of its consumers.
To hasten the rollout of Fifth Generation services in Nigeria, the NCC earlier announced that it would auction out two more 3.5GHz Spectrum band licences by the end of 2022.
Airtel would likely face competition for the 5G licence from Globacom and tier-2 telecom companies. Those that win the spectrum will collaborate with Mafab Communications and MTN Nigeria.
It’s interesting to note that after having its application for a 5G licence in Nigeria rejected in 2021, Airtel paid $40 million for more spectrum in Kenya to support its operations and 5G deployment plans.
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