5G: MTN, Mafab win Nigeria’s 3.5Ghz spectrum auction with $273m exit bid

After 11 rounds of bidding that lasted eight hours, Mafab Communications Ltd and MTN Nigeria Plc, have emerged as the two successful winners of the 3.5 gigahertz (GHz) spectrum auction for the deployment of Fifth Generation (5G) technology to support the delivery of ubiquitous broadband services in Nigeria.

MTN, 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 today (Monday, December 13, 2021).

In an exercise that clearly demonstrated demand outstripping supply, with Ascending Clock Auction System adopted by the Commission, the three bidders participated in the intensely competitive auction bid.

According to the statement by the Director, Public Affairs of the NCC, Dr Ikechukwu Adinde, “in the first round of the auction, the bid price was fixed at $199,374,000.00; $201,367,740.00 at second round; $204,388,356.10 at third Round; $209,407,962.50 at the fourth round and $215,782,901.30 at the fifth round.

“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 $275,904,886.25 with all the three bidders still actively participating. The Main Stage of the Auction, however, ended at the conclusion of the 11th Round, with Airtel listing an exit bid of $270,000,000, while MTN posted an exit bid of $273,000,000, giving way to the Assignment Stage. At this point, Airtel had dropped off from the race having posted a lower exit bid, thus leaving Mafab and MTN as winners of the two available lots.

Announcing the results of the Auction exercise, the Executive Vice Chairman of NCC and Auction Overseer, Prof. Umar Garba Danbatta, recalled the processes and activities leading to the successful conduct of the auction.

He said that 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,” he said.

“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 licence winners,” Danbatta added.

Arising from the above, Danbatta said that 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 expressed satisfaction that the auction process was efficient, fair, credible, well-organised and transparent and was designed to deliver the ideal outcome. Accordingly, Danbatta said the strongest bidders have emerged provisional winners, raising a substantial amount for the Federal Government.

The NCC boss congratulated the winners and thanked 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.

Sequel to the successful auction by the two winners, Danbatta said 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,” the EVC said.

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President Muhammadu Buhari Friday at State House Abuja urged the MTN Group to make the available top-of-the-range service to its Nigerian subscribers…  5G: MTN, Mafab win Nigeria’s 3.5Ghz spectrum auction with $273m exit bid  5G: MTN, Mafab win Nigeria’s 3.5Ghz spectrum auction with $273m exit bid  5G: MTN, Mafab win Nigeria’s 3.5Ghz spectrum auction with $273m exit bid  5G: MTN, Mafab win Nigeria’s 3.5Ghz spectrum auction with $273m exit bid.