The Global System for Mobile Communications Association says $500m and 6000 base stations are needed for 5G rollout in the top 10 cities in Nigeria.
The telecom industry umbrella organisation with more than 750 mobile operators as members disclosed this in its comment to the Nigerian Communications Commission on its ‘Draft Information Memorandum for the Auction of 3.5 Ghz Spectrum.’
The association said the $197.4m benchmark for spectrum auction was high, and might affect the actual rollout of the 5G network.
According to GSMA, the NCC had first disclosed this in its ‘Nigerian National Broadband Plan 2020 – 2025.’
The association added that the reserve price for the 5G spectrum ($197.4m) was not reflective of what the broadband hopes to achieve.
GSMA said, “The reserve price does not reflect the principles of the Nigerian National Broadband Plan 2020 – 2025 (NNBP).
“The NNBP highlights that one of the major investment categories to achieve the plan can include 5G roll out for top 10 cities, with an estimated 6000 base stations to be deployed at a cost of up to $500m.
“This cost will be borne by service providers that will also have to invest significantly in acquiring spectrum. The plan further notes that one of the incentives required to support the attainment of this target is to provide public sector incentives in Spectrum Pricing and Allocation.”
According to GMA, high spectrum prices will lead to reduced coverage, download speeds, and mobile broadband adoption.
The association added that the market should be allowed to determine spectrum assignments as regulators might unintentionally make decisions about spectrum auctions that distort fair market competition by setting aside spectrum, and restricting the amount of spectrum operators can access.
The NCC, however, said it benchmarked its reserve price after considering other jurisdictions in addition to other variables which might not have been considered by other studies before arriving at its reserve price which it believes is reasonable.
The NCC added that its reserve price remains $197.4m. According to MTN, in research conducted by Coleago Consulting Limited, the market value for 100 MHz of 3.5 GHz spectrum is $ 83.7m. According to MTN, the NCC’s reserve price is 136 per cent higher than the estimated market value, and it doesn’t align with a materially discounted market value of spectrum.
The Executive Vice Chairman, NCC, Umar Danbatta, said the commission was set to make N632.39bn from the sale of 5G spectrum to telecommunications firms, among other revenue sources in 2022.
The NCC boss said this when he appeared before the National Assembly joint committee on Communications to defend the NCC’s 2022 budget proposal.