Telecom firms must pay USD 1.5 million to buy 5G spectrum

The Uganda Communication Commission (UCC) is finally ready to dish out the 5G spectrum and it won’t come cheap for telecom companies. The telcos will have to pay an initial commitment fee (bank guarantee) of up to USD 1.5 million if they want to deploy the new technology using more than one frequency band. More on this later. The regulator wants to complete the allocation process by mid-August this year after the carrier has completed the spectrum reservation process by the 21st of July.

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The available spectrum includes the 700MHz, 800MHz, 2300MHz, 2600MHz, 3300MHz, 3500MHz, 5GHz (Block C), and the E-band (Block B) bands to facilitate the development of broadband services, capacity, and coverage across Uganda. Most 5G spectrum in the region is mainly in the 700MHz, 800MHz, 1800MHz, and 3300MHz bands.

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Available frequency bands to be awarded

UCC is set to assign the subject spectrum to telecom firms that present a utilization plan that presents the utmost value for the spectrum and socio-economic benefits. If there is an assignment of radio spectrum where demand exceeds the amount of spectrum available, the Commission shall use a competitive process (beauty contest) to assign the subject spectrum.

The regulator has instituted some caps to ensure rational and equitable distribution of spectrum in all bands. For example, The total 5G spectrum holding in the sub (below) 1GHz spectrum band(s) of a successful applicant of the 700MHz or 800MHz band after this process shall not exceed 2x20MHz. This provision applies especially to licensees with existing spectrum holdings in the sub-1GHz band. The total spectrum holding of a successful applicant of the 5G spectrum for 2300MHz, 2600MHz, 3300MHz, and 3500MHz bands after this process shall not exceed 220MHz.

UCC will not assign telecom companies to have two 5G specturm allocations in the low bands i.e. in both the 700MHz and the 800MHz. This a precious band as it helps with the quick roll-out of coverage of networks as it offers good coverage. When it comes to the high bands, no carrier will be allocated more than two (2) bands of the following mid-bands 2300 MHz, 2600MHz, 3300MHz, and 3500MHz. There will be no hold spectrum in both 2300 and 3300MHz.

Geographical Scope & Spectrum Fees

Successful applicants holding a National Telecommunications Operator (NTO) license are eligible for the grant of the right to use the respective spectrum across the entire national geographical territory of Uganda, including land and water bodies. An NTO license holder may, however, opt and is eligible to apply for spectrum on a regional basis.

Successful applicants holding Regional Public Infrastructure Provider licenses (RPIP) shall be granted the right to use the respective spectrum in the respective geographical region(s) specified in the respective RPIP licenses.

Potential 5G spectrum applicants are required to submit a bank guarantee of the amounts in the table below, as applicable, which should be valid until 30th September 2023. A bank guarantee is a guarantee given by the bank on behalf of the applicant to cover a payment obligation to a third party. UCC has done this to prevent speculative applications and engagement in inappropriate behavior during this process. 5GHz and E-band applicants, shall not be required to submit a bank guarantee.

An applicant shall submit a bank guarantee of USD 1,500,000 if they apply for spectrum in both clusters 1 and 2. Otherwise, the individual guarantee for each cluster shall apply. Applicants shall be required to pay the applicable fees in full, as outlined in the Uganda Communications (Fees and Fines) (Amendment) Regulations, 2023, S.I. No. 24 of 2023.

5G spectrum roll-out plans

5G spectrum applicants must present to UCC a clear roll-out and business plan before they can award them any spectrum. The regulator requires telecom companies to have a five-year roll-out plan and should highlight the specific milestones, timelines, and indicators to measure progress for the realization of the proposed network and/or expansion.

The Roll-out plan should also explain to what extent the existing network infrastructure shall (in the case of existing licensees) be re-used to among others achieve the following;

• At least 90% geographical coverage of broadband internet within the geographical area associated with the telecommunications license held/sought (including water bodies) by the 5th anniversary of the date of grant of the telecommunications License under which the Radio Frequency Spectrum Authorisation is being granted.
• An average street-level (outdoor) downlink internet speed on handheld mobile terminals of 25Mbps in the Great Kampala Metropolitan Area by 2025
• An average street-level (outdoor) downlink internet speed on handheld mobile terminals of 15Mbps in all district centers (in a coverage radius of over 8 km) achievable by the 5th Anniversary of the date of grant of the associated telecommunication license.

Before UCC will assign the 5G spectrum, telecom companies should commit to the following when it comes to data costs by 2025;

• Reducing the cost of 1GB of mobile internet to less than UGX 2,100
• Reducing the cost of 1Mbps of fixed wireless internet connection to less than UGX 106,400