Thursday, 30th November 2023

NCC rejects operators’ plea for longer tenor on spectrum fees

By Adeyemi Adepetun 
23 September 2021   |   4:20 am
The plan to hike spectrum fees by about 400 per cent is currently a source of concern to telecommunications operators in the country.

Nigerian Communications Commission

•ITU, ATU canvass management of frequency 

The plan to hike spectrum fees by about 400 per cent is currently a source of concern to telecommunications operators in the country. 

But to cushion this impact, operators suggested that spreading the payment for spectrum over a period of time would help a great deal in managing capital expenditure (CAPEX), cost of sales and guarantee investment for the continued improvement of network infrastructure.
According to them, a longer tenor will be in alignment with the provisions of the New National Broadband Plan (NNBP) 2020-2025, wherein it was recommended that the payments of spectrum fees should be spread across the lifetime of the licence to ensure network rollout is not adversely impacted. 

Despite the appeal, the Nigerian Communications Commission (NCC) did not give assurance of granting the demands of the operators. 

The service providers expressed these concerns at a virtual public hearing organised by the NCC. The draft spectrum regulation, the outcome of the hearing, recently released by the Commission, showed that submissions were received from operators, including Airtel Networks Limited; MTN Nigeria Communications Limited; IHS Nigeria Limited; Smile Communications Limited; VDT Communications Limited, and Huawei Limited. 

Already, ahead of the planned deployment of 5G networks in the country, the Federal Government, through the NCC, has disclosed that each slot of the spectrum frequency would be going for a fixed price of N75 billion. 

In the draft spectrum regulation, Airtel raised the fact that the 400 per cent increment in spectrum fees, would have negative impact on the industry, especially with the need for more rollout of 4G networks and the impending 5G. 

According to the public hearing report, “Airtel requested the Commission to retain the subsisting regime to support expedited deployment of 4G/5G technologies for the continued growth and development of a more robust digital economy.” 

From Smile Communications’ perspective, spreading the payment for spectrum over years would help operators a great deal in managing capital expenditures and upgrades of network infrastructure. 

But the NCC in its response to this, said the provision of the New National Broadband Plan 2020 to 2025, under reference presumed and proposed the payment plan for new entrants/new licensees. “However, the commission will continue to determine the payment plan as applicable. Therefore, the recommendation is not acceptable,” the regulator said. 

Corroborating Airtel’s stance, VDT Communications, a wholesale broadband provider, observed that the unit price per MHz for each licensing region was increased by 400 per cent and opined that there was no clear basis to arrive at the unit price per MHz. 

VDT suggested that the second schedule to the regulations should be reviewed to consider and reflect the market value, which should be directly proportional to a frequency spectrum size. 

In its response, NCC disclosed that the pricing formula was set out in 2004 and the present calculation was based on Consumer Price Index. 

The telecoms regulator noted that the Frequency Spectrum Regulations is a vehicle that enables the commission meet its sole and exclusive mandate in Section 121 of the Nigerian Communications Act by assigning scarce national resource in an equitable manner. 

According to it, the purpose of the review was to further ensure that frequency spectrum are assigned and managed in a way that ensures fair pricing and efficient deployment of attendant services. 

On its part, social media platform, Facebook suggested that the Commission considered some things as it develops and implements its frequency spectrum trial licences.
These suggestions include that technology testing and service trials involving members of the public should be permitted under a frequency spectrum trial licence; trial licence applications and processes should be simple and predictable, impose only a minimal set of necessary conditions for such testing and trialing, and be processed in a swift manner; trial licences should be for a duration of at least 12 months; licence fees for trials should be minimal and associated with administrative processing costs and that the NCC should issue frequency spectrum licences for trials in bands under review for new frameworks and licensing, such as the 60 GHz band. 

Responding, NCC said the Commission is implementing a three-month tenure for all form of trials and “we believe it suffices to test any technology on a non-commercial basis.” 

MEANWHILE, the African telecommunications industry has recommended stepping up regional collaboration on radio spectrum management to make room for the expected growth in terrestrial and space services, and to ensure communities are connected across the continent. 

Regulators, industry experts and academia met virtually recently to discuss Africa’s future radio-frequency spectrum requirements in the context of revisions made to the Radio Regulations by the last World Radiocommunication Conference WRC-19 held in Sharm-el-Sheikh, Egypt. 

Participants at the ITU Regional Radiocommunication Seminar for Africa (RRS-21-Africa) organized in collaboration with the African Telecommunications Union (ATU), reviewed updates to the Radio Regulations, the key international treaty governing radio spectrum management. They also discussed the current regulatory framework for international frequency management, ITU Radiocommunication (ITU-R) recommendations, and best practices for spectrum use by both terrestrial and space services. 

ITU Secretary-General, Houlin Zhao, said the digital revolution is continuously opening doors to a variety of new applications that are spurring greater interest in, and demand for, a limited spectrum resource 

“Well-managed radio spectrum is part of the basic infrastructure to support national and regional socio-economic progress. Regional cooperation in this vital field will enable countries in Africa to achieve universal connectivity and promote sustainable development,” he stated. 

Telecom industry representatives at RRS-21 Africa shared their expertise to help advance and accelerate the development of radiocommunication services across the continent, especially with respect to deployment challenges, growing reliance on satellite systems, and emergency communications. Participants also discussed an update on the GE84 Plan Optimization project, which has identified additional frequencies for FM radio broadcasting across Africa. 

ATU Secretary-General, John Omo, said: “Our collaboration with ITU continues to enable many countries to make progress in the field of spectrum management, including identification of new frequencies for FM radio broadcasting, 5G implementation and licensing of satellite services. However, international cooperation must also address each region’s specific development priorities.” 

He added: “Rural connectivity remains a challenge across Africa. ATU looks forward to working with ITU in the development of spectrum policy, regulations and practices to scale up digital connectivity even in the hardest-to-reach areas.”

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