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2.6GHz Spectrum Auction: Why Investors Shun NCC

Investors may have shunned the offer for sale of the 2.6GHz frequency spectrum made by the Nigerian Communications Commission (NCC), thereby putting the plan of the Federal Government to grow the country’s broadband penetration to 30 per cent in jeopardy, according to the Punch.

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While the mock auction for the spectrum, which was scheduled to hold on Monday, failed to hold, officials of the NCC kept mum and there was no indication that the real auction scheduled to hold today (Tuesday) would take place as scheduled in the Information Memorandum made available by the regulatory agency in March.

Information available to Punch showed that the regulatory agency might have recorded a low turnout of bids from potential investors, who might have become cautious about investing in the Nigerian telecommunications industry because of the uncertain investment climate.

Industry sources also told our correspondent that investors might have shunned the proposed sale of the frequency based on the perceived high reserved price of $16m per slot, while new investors as well as existing ones were being cautious because of the paucity of the foreign exchange they needed for equipment.

According to Punch, calls to Mr. Tony Ojobo, director of Public Affairs, NCC  on Monday were not picked, while a text message sent to his mobile telephone line had yet to be replied as of press time.

In an Information Memorandum released on its website on March 11, the NCC had set a reserve price of $16m for a slot of the frequency spectrum. One lot or slot of the frequency is made up of two portions of 5MHz.

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It also proposed to hold a mock auction for the licensing process on May 16 in Abuja. Applicants were required to submit all bidding documents by April 29, while notice of qualifying bids were to be published on May 6. None was made available on Monday and enquiries at the regulatory agency did not produce any tangible result.

While a reserve price of $16m had been set, actual price for the frequency spectrum could be much higher depending on the number of applicants and how much they were willing to commit on the spectrum.

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