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Need for efficient spectrum management regime

By Adeyemi Adepetun
15 April 2015   |   5:58 am
A MAJOR telecommunications market resource is frequency spectrum. It is licensed to operators to roll out their various telecommunications and other value-added services, as communication systems require a certain amount of electromagnetic bandwidth to operate. Though, not seen, but it has been described as the ‘life blood’ of the telecommunications industry. A former Executive Vice…
NCC head office, Abuja

NCC head office, Abuja

A MAJOR telecommunications market resource is frequency spectrum. It is licensed to operators to roll out their various telecommunications and other value-added services, as communication systems require a certain amount of electromagnetic bandwidth to operate.

Though, not seen, but it has been described as the ‘life blood’ of the telecommunications industry.

A former Executive Vice Chairman of the Nigerian Communications Commission (NCC), Dr. Ernest Ndukwe, described spectrum as ‘oxygen that sustains the wireless ecosystem’.

In different parts of the world, organisations allot part of the electromagnetic spectrum to different uses, even as international agreements are often required, so that communications systems in neighbouring countries are not interfering with each other.

Though decision to manage frequency spectrum allocation is handled by the National Frequency Management Commission chaired by the Minister of Communication Technology, Dr. Omobola Johnson, the assignment of part of the available national spectrum band to telecommunications is handled by the Nigerian Communications Commission (NCC), which regulates the nation’s telecommunications sector.

Global System for Mobile Communications operators such as MTN, Globacom, Airtel and Etisalat are currently operating on the 900/1800/1200 MHz spectrum, with other spectrum bands allotted to other segments in the telecoms sector such as the Code Division Multiple Access and fixed line networks, to broadcasters and other business concerns.

Spectrum allocation is also key to ensuring smooth wireless communication among agencies, most especially the security operatives, as the regulator agency may deem fit.

Apart from serving as a source of income to the government, having contributed several billions of naira to the government coffer over the years, experts contend that current shift from fixed to wireless communications services, as it is predominantly the case in Nigeria, demands that efficient allocation of frequency spectrum is strengthened by the regulator.

Pyramid Research, a London, United Kingdom based research outfit, disclosed that Nigerian telecommunications operators have invested a cumulative $32 billion (about N6 Trillion) in deploying their networks over the last 10 years with 16 per cent of $4 billion (N788 billion) of that spent on spectrum and license fees.

According to experts, as the world becomes increasingly wireless (with cordless phones, cell phones, wireless internet, GPS devices, among others), allocation of the available spectrum to each technology becomes increasingly contentious, as each user community (usually manufacturers of the wireless equipment) wants more bandwidth in order to be able to sell and service more units.

The liberalization of Nigeria’s telecommunications sector in 1992 via Decree 75 and the 2001 digital mobile licence auction may have actually brought attention to spectrum allocation in Nigeria, going by the GSM auction, which ushered in operators including Econet Wireless, which after so many branding and rebranding became Airtel. The period also brought in MTN Nigeria, which today is the largest telecommunications firm in the country with over 45 per cent market share and about 60 million subscribers. Both MTN and Econet paid $285 million each for the GSM licenses.

In 2003, Globacom, owned by Nigeria’s oil magnate, Mike Adenuga Jr, was licensed, so was Etisalat in 2008 for GSM services. Indeed, between 2001 and now the NCC has done several auctions.The most recent being the 2.3GHz spectrum, which was in February 2014, where BitFlux Communications beat Globacom to the license.

One year after the last auction, there have been several calls for NCC to offer the 2.6GHz spectrum band for service providers, especially now that the country has set 30 per cent broadband target for 2018 and the increasing data explosion across the globe.

Though, the regulator hearkened to the calls and promised to auction it last quarter of 2014, but citing administrative challenge, it announced the postponement in November.

After several calls for the auction, NCC had set another May 2015 date for the auction, but again without any reason, it announced another postponement of the 2.6GHz auction, making it the second time in four months. .

Reacting to the suspension, President of the Association of Telecoms Companies of Nigeria (ATCON), Lanre Ajayi, has said the suspension of the auction of the 2.6GHz spectrum band is not good for the image of the telecoms industry, which the NCC has laboured hard to build over the years.

According to him, Nigeria initially had challenges of predictability and consistency, which he said, were the concern of both local and international investors. He, however, said the NCC had tried to overcome the challenges through its transparent manner of auctioning past spectrums,

He noted that the challenges might resurface if the issue of frequent suspension of the auction process for the 2.6GHz spectrum is not addressed.

The Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said although the suspension has become worrisome to industry stakeholders, “it is better for the NCC to get it right from the beginning, in order to maintain the credibility of the industry in the eyes of international and local observers.”

Another telecoms expert, Kehinde Aluko however, argued that the regulator knows best why it decided to go for another postponement of auction. He however, urged NCC to be straightforward in its dealings to avoid any public misrepresentation.

Aluko was also of the view that attention should also be focused at ensuring that digital dividend spectrum of 700MHz approved by the International Telecommunications Union (ITU) for mobile broadband about three years ago from the broadcasters are gotten,

He stressed that this frequency is supposed to be taken from broadcast media who are due to migrate to digital transmission on a lower frequency band.

“As at today, none of these frequencies has been released despite the fact that we are on the eve of migration to digital broadcasting. Besides, we are not sure yet whether any of these broadcast media is ready for digital transmission”, he state.

Indeed, there are processes for frequency allocation. For instance if these frequencies are taken over from the broadcast media by the National Broadcasting Commission (NBC), they are handed over to the National Frequency Management Commission (NFMC), which is the custodian of all frequencies in Nigeria under the Ministry of Communications Technology.

The NFMC then decides what slots it gives out to the NCC for allocation accordingly with appropriate guidelines according to global best practices,

The 700 MHz band indeed will enable for Long Term Evolution (LTE) of course mobile broadband.

“So it will be an advantage for the country if these are released by the appropriate authority for NCC to assign to would be applicants”, Aluko stressed.

A top official of NCC, who doesn’t want to be quoted, said at the weekend, that the Digital Dividends are not yet available, and so NCC cannot assign what it does not have.

“It is also true that the 2.6 GHz has had two postponements. The NCC wants to get it right. Recall that in 2001 after the Digital Mobile Licence (DML) auction, Communication Investment Ltd (CIL) one of the winners did not pay for the licence because the Frequency allocated to CIL was believed to be encumbered and it lost the licence and the deposit for same.

“So the NCC wants to clear any foreseeable cobwebs before such a major licence round like the 2.6GHz.Indeed, this licensing round is work in progress”, he stated.

Already, the Infracos licences have begun. Lagos and North Central including Abuja are already done. The other five zones are works in progress.

Government through the NCC is dangling incentives to attract bidders to zones, which are believed to be less attractive commercially. Besides, tax holidays of between five and seven years, about 30 per cent for Capital Expenditure (CAPEX) is also in the offing.

The NCC official disclosed that the telecoms regulator has announced the availability of 5.4 GHz spectrum, across the 36 states of the federation, stressing that there are advertisements about this and that applications are already being received at the commission.

Still on spectrum licensing, a stakeholder consultative forum on the 70/80 MHz band took place in Lagos on March 12.

The NCC official informed that, the commission is already putting things in place in line with the imputs of stakeholders and industry players. He said the commission would fine tune the document and release the rules for the bidding process very soon.