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Between spectrum allocation and improved telecoms services

By Between spectrum allocation and improved telecoms services
02 March 2015   |   11:00 pm
THE number you have dialed is not reachable at the moment, please try again later.” Does this feedback sound familiar? Of course, it must be, if you are one of the over 140 million mobile phone subscribers in Nigeria.     You are also likely to be familiar with a situation where you’re in the middle…


THE number you have dialed is not reachable at the moment, please try again later.” Does this feedback sound familiar? Of course, it must be, if you are one of the over 140 million mobile phone subscribers in Nigeria. 

   You are also likely to be familiar with a situation where you’re in the middle of a call and all of a sudden, the connection breaks. You put a call through to your mother using the same number you used only an hour ago, and the familiar prompt tells you “the number you have dialed does not exist on the … network.” Or – this one takes the cake – you dial your colleague or loved ones with the same number you have always used to reach them and a strange voice comes on and asks, “Who’s this? Sorry, you have dialed a wrong number.”

   Call set up failure, poor call retention, call drop, weak signals, fluctuations, crosstalk, echo back, among others, are some of the technical service quality issues subscribers on the GSM networks have had to contend with since the introduction of digital mobile telephony over 13 years ago. Quality of service (QoS) is perhaps the touchiest issue in the telecommunications industry today. 

   A House of Representatives ad-hoc committee set up to investigate complaints of poor QoS once recommended a 12-month ban on sale of GSM SIM cards to enable telecoms operators boost their QoS in that period. In 2012, the Nigerian Communications Commission (NCC), the industry watchdog, slammed a fine in excess of N1 billion on all telecoms operators for what the regulator called their failure to meet key performance indicators over a particular period. 

   Analysts however, believe that while dishing out penalties to telecoms companies may convey a strong impression of a regulator dealing with “willfully errant operators”, the real deal is to go to the bottom of the cause of poor QoS in order to address it holistically.

    The Senate also made attempts to address this issue and had in the past set up a committee to investigate QoS and other telecoms matters. At the public hearing of the committee, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) listed “fundamental issues confronting QoS” to include power, vandalism, multiple regulation and multiple taxation, among others. 

   Unfortunately, commentators and even industry stakeholders themselves regularly understate the role spectrum plays in QoS. Spectrum is an important resource used for the transmission of voice and data in various fields of human endeavor: telecommunications, transportation, broadcasting, and healthcare, among others. Telecommunications depends heavily on spectrum, more than any other sector, to transmit voice and data. 

    According to a former Director-General, National Broadcasting Commission, Yomi Bolarinwa, “Radio frequency spectrum is the electro-magnetic wave used for the transmission of radio, television and even the mobile phones.” 

   The former Executive Vice-Chairman, NCC, Dr. Ernest Ndukwe, puts it even better when he said, “Spectrum is the oxygen that sustains the wireless ecosystem.” 

   Indeed, indications have emerged that the telecommunications networks are gasping for breath due to inadequate supply of the ‘oxygen’ to sustain them. The current scarcity of spectrum accessible by the telecoms industry implies that voice and data demand on the telecom networks has long outstripped the supply of spectrum licensed to them by the NCC. 

    Danson Njue, an industry analyst who tracks growth in the telecommunications sector as well as regulatory issues, said: “Several operators have complained of lack of spectrum as a key reason for poor QoS.” 

   MTN had “experienced several interference issues with Glo, Airtel, and other networks, though resolved amicably,” said Senior Manager, Transmission Access Planning, MTN Nigeria, Olusegun Salami. 

   The Chief Executive Officer (CEO), MTN Nigeria, Michael Ikpoki, talked about how critical “frequency interference” is to “efficient spectrum management” in the country. The network provider believes the glitches could be avoided with proper coordination before and after allocation of radio frequencies to applicants.

    Also, a former CEO of Etisalat Nigeria, Steve Evans had times without number advocated for fresh spectrum allocation, stressing that this was crucial to improving service quality in the country.

   There is a variance between the growth rate of telecoms companies and the efficient allocation of spectrum by the regulator. A survey in September 2014 by Pyramid Research Strategic Consulting Group showed that the “yearly average subscriber growth over the past five years was about 15 per cent.” Spectrum allocation has, however, not kept pace with this growth, leading to congestion and other service issues. 

  At a forum, Ndukwe said, “African regulators need to act much more quickly in making spectrum available because it is holding broadband development back.”

   Last year, government suspended the auction of the 2.6GHz and 5.4GHz frequency bands, citing “administrative constraints”. Analysts believe the spectrum bands would help deepen broadband penetration. They are of the view that the 2.6GHz spectrum would help broadband deployment and largely resolve the persistent voice and data services quality.

   Spectrum, according to NCC, is a “scarce resource” and in the face of high demand, its pricing is expectedly high. The Pyramid report showed that “Nigerian telecoms operators have invested a cumulative $25 billion (about N4.9 Trillion) in deploying their networks” over the past decade, with 16 per cent or $4 billion (about N788 billion) of that spent on spectrum and licence fees.    

  Such relatively high spectrum fees coupled with huge capital outlays on infrastructure puts the networks under intense pressure to optimize return on investment, which leads to aggressive drive for subscribers. Unfortunately, with this drive for subscribers unmatched by spectrum availability and other vices including vandalism, multiple taxation among others, QoS is compromised. There is clearly, therefore, a strong imperative for enhancing radio spectrum accessibility and in a manner that is affordable by the telecoms networks.

   Indiscriminate occupation of radio frequency bands, which has tended to happen fairly frequently in the past, especially by government organizations, also often leads to interference, which impacts quality of service on the telecommunications networks.

   Analysts are of the view that while the NCC has been quite efficient at managing available spectrum, it can do even more at optimizing such spectrum, thus helping to ensure that it is deployed to areas that can best utilize it. In this regard, according to them, it is advisable that where previously allocated spectrum is either un-utilized or heavily under-utilized, such spectrum could be re-allocated to other telecommunications companies, which appear to have the capability to utilize it. In addition, given the increasing importance of frequency management, it is time to begin strict enforcement of spectrum monitoring and management to ensure that rules are not violated and that spectrum interference is minimized. 

   The demand for mobile services is expected to rise over the next decade. “There are indications that the Nigerian telecommunications market still operates below real potential… and broadband penetration remains low at less than 10 per cent,” the Pyramid Report indicated. 

   Telecoms operators are already strategizing to take advantage of the expected growth. 

   Shortly before it was suspended last October, The Guardian, had reported that MTN Nigeria, in anticipation of the acquisition of 2.6GHz spectrum last year, had plans to separate its voice and data businesses. 

   “MTN welcomes the possibilities that additional spectrum that will enable the industry deliver broadband ideals to Nigerians is being made available by the NCC,” said General Manager, Corporate Affairs, MTN Nigeria, Funmi Onajide. 

   She added: “Operators intend to utilise the existing 900/1800 MHz spectrum (2G and 3G) for voice services, while the 2.6GHz band, once allocated to deserving mobile operators, would be deployed specifically for broadband and data oriented services.”

    Nonetheless, the National Broadband Council had directed the NCC to ensure it auctioned the 2.6GHz spectrum this quarter.

   Also, the EVC of NCC, Dr. Eugene Juwah, at a forum in Lagos in January promised that the 2.6GHz spectrum auction will be done before the end of this quarter, stressing that new modalities for the sales would be out soonest.   

   Indeed, the telecommunications sector remains a critical part of the economy and the growth projections of government. Over the past decade, the sector accounted for 30 per cent of foreign direct investments in the country, paid close to N300 billion in taxes in that period and provided about 10,000 direct employment and over a million indirect jobs. It spends about N80 billion yearly on all forms of marketing activities.