How 5G License Was Competed For, Lost & Won December 13

How 5G License Was Competed For

OpenLife Nigeria reports that the silence in the conference hall of the first floor of Transcorp Hilton Hotel, Abuja, on the night of Monday 13th December 2021 at 7.20pm immediately the large screen flashed that ‘Auction Stage Has Ended’, was glaring that if a pin had dropped on the ground, it would have been noticed by everyone present.
The occupants of the hall were still holding their breath when the screen flashed another message at 7.43pm that bidders of the 3.5 Gigahertz (GHz) spectrum for the deployment of Fifth Generation (5G) technology had moved to ‘Assignment Stage’. What was uppermost in the minds of everyone including Dr. Shafi Ndanusa, Assistant Director in the Human Capital and Administration’s Department of the Nigerian Communications Commission (NCC) alongside Dr. Omoniyi Ibietan, who were the comperes of the auction process was who actually emerged winners of the two 100-Megahertz (MHz) Lot on offer.
MTN Nigeria Plc, Airtel Nigeria and Mafab Communications Limited were slugging it out for the spectrum licence to deploy 5G mobile networks in Nigeria.
The battle lasted eleven rounds into the night. At exactly 8.22pm that night, the executive vice chairman of NCC, Professor Umar Danbatta led the Board of Commissioners of NCC, spectrum bidders, telecom industry and public sector observers, sauntered back from the three separate “Auction Rooms” and “Monitoring Rooms” in the hotel where the bidders were kept for nine hours while the auction was ongoing.
The hall was packed full with media representatives, global telecommunications equipment vendors, national telecom industry association members, officials from the ministries, departments and agencies (MDAs) from the Federal Ministry of Communications and Digital Economy as well as men few men from Independent Corrupt Practices and Other Related Offences Commission (ICPC), Department of State Service (DSS) as well as the Nigerian Police Force (NPF).

The Bidders
The preferred bidders who participated were MTN Nigeria led by its chief executive officer, Karl Toriola in Bidder Room two and Monitoring Room three; Mafab led by its chairman, Alhaji Musbau Mohammad Bashir in Bidder Room One and Monitoring Room Two; while Airtel led by Mr. Sreedhar Krishna, its chief financial officer in Bidder Room Three and Monitoring Room one.
The bid process was supervised by officials of the DSS), ICPC and observed by officials of the Association of Telecommunications Companies of Nigeria (ATCON) and Association of Licenced Telecommunications Companies of Nigeria (ALTON), NCC and other telecom stakeholders.
Professor Umar Danbatta who doubled as the Auction Overseer announced MTN Nigeria and Mafab Communications as the preferred winners of the 3.5GHz spectrum licence and that they would pay $573,920,000.00 (N237,028, 960,000.00) for the two licences to deploy 5G technology in Nigeria.

Mafab, The Dark Horse
Earlier that morning, the major discussion on hush tones among people in the hall was about the dark horse in the race, Mafab Communications Limited.
Some of the views were that it could have been propped up to make the auction competitive. But yours sincerely learnt from a top government official that Mafab was actually serious and its presence at the bid was already giving concern to officials of MTN Nigeria Plc.
Without Mafab bankrolled by Alhaji Musbahu Mohammad Bashir, the quiet effervescent Kano billionaire, the N237 billion raised by the Nigerian Communications Commission (NCC) at the auction of the 3.5 gigahertz (GHz) would not have happened.
Mafab gave MTN and Airtel a run for their money. Mafab’s relentlessness to go the distance in the auction made Airtel Nigeria to apply for the Exit Bid at $270 million and drop off the race.
Industry insiders say Mafab means business and it is already in high level discussions with international gear makers such as Huawei and ZTE about its 5G business plan.
The little know company with its head office at No 8a Ibiyinka Olorunibe close, off Amodu Ojikutu street, Victoria-Island, Lagos was incorporated on the 8th of July, 2020 and licenced by the NCC to provide and operate local interconnect and international carrier services. It operates under three licences: Interconnect Data Exchange (IDE); International Data Access (IDA) and Value Added Service (VAS).
Mafab’s founder and chairman, Alhaji Musbahu Mohammad Bashir, is an engineer known for his Midas touch. He is the chairman of Althani Group of Companies with diverse interests across the oil and gas, banking, insurance, real estate and telecom industries with head office at 12A Yalinga Street, Wuse II, Abuja, FCT.
Alhaji Bashir is the chairman, Board of Directors of Salam Takaful Insurance as well as Cobalt International Services Limited, a pre-shipment Inspection Agent for dry goods and bulk liquid cargoes for oil and gas exports in the country.
He is also a director on the Board of Jaiz Bank Plc, Bento Drill Nigeria Limited, Offshore Technologies International Limited, and Resource Capital Group. Alhaji Bashir worked with Hammad Development Facilities and Jadai Diversified Services.
He has vast experience of more than two decades in general management, leadership and engineering.
He has attained several certifications from high-profile institutions like, American University, London, Harvard Business School, USA.
Mafab’s Journey to 5G And Rollout Obligations
The final Information Memorandum (IM) stated that the auction comes with a 10-year spectrum licence and a minimum requirement of an operational Universal Access Service Licence (UASL).
According to the document, “where a winner does not hold a Unified Access Service Licence (UASL) which is the operational licence for the frequency spectrum slated for auction, it will be issued at an additional fee of N374, 600,000.00 only or at the subsisting licence fee at the time of the auction.”
The 5G eventual licences will have a rollout obligation plan spanning a period of 10 years, beginning from the date of award of the licence. Between the first and second year of the licence, the operators are expected to roll out service in, at least, one state in each geo-political zone.
From the third to fifth year, they are obligated to cover all the zones. Between six to 10 years, they should cover all the states in the country, according to guidelines set out in the IM. The spectrum lot won by each bidder will be assigned on a nationwide basis covering all the 36 states of the federation and the Federal Capital Territory (FCT) on a subsisting policy on “use-it or lose-it” with respect to the use of assigned Spectrum.
In an exercise that clearly demonstrated demand outstripping supply, with Ascending Clock Auction System adopted by the NCC, the MTN, Airtel and Mafab participated in the intensely competitive auction bid. 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 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 three bidders still actively participating.
The Main Stage of the Auction, however, ended at the conclusion of the 11th Round, with Airtel posting 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, Prof. Danbatta, recalled the processes and activities leading to the successful conduct of the auction and publication of 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 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,” he said.
Arising from the above, Danbatta said that the winning bid price for the auction was $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. Sequel to the successful auction by the two winners, Danbatta said in line with the processes outlined in the IM, the provisional winners 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. Thus, 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.
He 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.
The EVC thanked all stakeholders, who have contributed to the success of the auction process. He said the huge investment that will accrue from the sales of the spectrum band auctioned will result in increased transformation in life and businesses.
Earlier, at the opening ceremony, the minister of communications and digital economy, Prof. Isa Ali Ibrahim (Pantami) expressed optimism that the dawn of 5G network in Nigeria will offer significant advantages over current technologies, some of which include much lower latency, higher bandwidth, greater device density, longer battery life for nodes, and greater network flexibility.
Also in his remarks, the chairman, Board of Commissioners, NCC, Prof. Adeolu Akande thanked the bidders for believing in the Nigerian communications sector by their willingness to invest millions of dollars in the sector for the provision of 5G services, noting that NCC was committed to transparency and openness, which the auction represents.
Prof. Akande’s voice was amplified by the Executive Commissioner Technical Services at NCC, Engr. Ubale Maska, who served as the auction adviser. While delivering the vote of thanks, Maska conveyed the gratitude of the NCC to all stakeholders, giving special mention of the Auction Planning Committee, the media and staff of the commission.