Four telcos go head-to-head in 800MHz spectrum auction today

All is set for the auction of the 800MHz spectrum band for 4G LTE as the four bidders ready themselves to battle for the licence between today, Wednesday December 2 and 6.

The winner of the bid would be announced on December 7.

The four companies are running for a pair of 2x10MHz spectrum blocks within the 800MHz band, which has become available for broadband telecom services because of the global migration from analogue to digital television systems.

The four bidders are Ghanaian companies Surfline Communications, Goldkey Telecoms and Migson Communications, and South African telecoms giant, MTN Ghana (Scancom Ghana Limited).

They have all paid their non-refundable GHC200, 000 registration fees and the initial deposit of US$6.75 million each, which is 10 per cent of the US$67.5 million floor price of each of the two spectra blocks.

The highest bidder will win at the end of the day, and that company gets to pay the difference between the winner price and the 10 per cent initial deposit in 60 days. But the losers will be given back the 10 per cent deposit they made.

The four bidders have also completed engagements and an orientation process with the selected auctioneer, KPGM, how has assured to deliver a transparent, objective and professional exercise.

Indeed, KPMG has brought in some of its expert international staff to ensure the highest quality of professionalism in the auction process.

Background
This process started way back May 14, 2015, when the telecoms regulator, National Communications Authority called for public consultation prior to announcing the dates of the actual auction.

The public consultation process ended on June 11, 2015, by which time nine entities had put in their comments, contributions and concerns about the process.

The nine were MTN Ghana, Airtel Ghana, Vodafone Ghana, Tigo Ghana, Ghana Telecoms Chamber, Qualcomm International Incorporated, GSM Association, Ing. Dr. Adam Icarus Imoro and team made up of Surfline Communications, Goldkey Telecoms, Blu Telecoms and Broadband Home.

They each raised issues that led to some adjustments in the initial proposal by the NCA regarding the spectra auction. For instance, the initial floor price was $92 million plus, but it was reduced to $67.5 million based on respondents request for a reduction.

The deadline for the submission of bids was set at November 9, 2015 and by the close of that date only four had paid the mandatory non-refundable GHC200,000.

ICT Chamber
But after this rather long process, there emerged the Ghana ICT Chamber allegedly comprising of a 10-member Ghanaian consortium seeking to quash the open auction and offering to pay the $83 million required for the digital migration in Ghana, in exchange for the entire 800MHz spectrum.

Interestingly, the ICT Chamber included Surfline and Goldkey, who already have a Broadband Wireless Access (BWA) licenses in the 2600MHz band for 4G LTE services; and the two are also in the run for the 800MHz band.

In their submissions, the ICT Chamber directly attacked MTN Ghana's involvement in the open auction simply because MTN is a South Africa company. They insisted that Ghana's most priced asset cannot be given to a South African company so it must be indigenized.

They also sought for protection against the entry of the six 3G telcos into the 4G space, insisting that the locally-owned 4G players need more time to "recoup their $200 million investment and make a handsome profit".

NCA
But the NCA has explained that it had already taken care of local content in the telecom industry by awarding the first three blocks of the 2600MHz spectra strictly to local companies Surfline, Blu and Goldkey.

Moreover, winners of the new 800MHz spectrum would also be required to offload at least 35 per cent shares to Ghanaians.

MTN
MTN, which was attacked directly by the ICT Chamber, has also said that Ghanaians need to be given the chance to enjoy affordable and easily accessible 4G service before the technology becomes obsolete.

The company believes, with its 15 million customers and counting, it is in the best position to make this happen on a faster scale than any industry player.

It has therefore expressed the commitment and its readiness to deploy 4G LTE within six months after it gets access to the spectrum.

MTN Ghana CEO, Ebenezer Twum Asante said "we are ready, our equipment are ready, our expert staff are ready and our customers are ready with the 4G compliant devices waiting for us to rollout the service, and we can't wait any longer."

When the 800MHz spectrum is deployed on a larger scale, it will help to improve the performance of 3G networks and also provide 4G access to many more Ghanaians at affordable rates. It will also enable the rollout of more innovative products and services like mobile health, mobile agriculture, mobile education and more.

Story by Ghana | Samuel Dowuona | [email protected]