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Rural-urban telecoms service to see new competition, growth

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A telecoms mast

ADEYEMI ADEPETUN, in this report, writes that Nigeria’s telecoms sector is still investors’ delight. This is following the recent interest by SpaceX, owned by Elon Musk, which plans the extension of its satellite service into Nigeria. Competition is expected to be renewed in that space to the benefit of consumers.

As in many developing nations in Africa and around the world, Nigeria’s rural population has declined in recent years as a result of steadily increasing rural-urban migration. While this trend is expected to continue for the foreseeable future, providing public services to rural communities remains a government priority.

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In terms of telecoms, Nigeria’s rural population is consistently underserved compared to city dwellers, and the major telecoms providers have invested heavily in population centres, while largely ignoring the sparsely populated rural areas. In recent years the government has renewed its efforts to boost rural telecoms access, primarily through development initiatives.

Since the liberalisation of the telecoms market in the early 2000s, the government has worked to boost investment in rural areas by attaching provisos to telecoms licences that require holders to provide services across a certain percentage of the country. While this has had a positive impact on rural access, some percentage of the population remains cut off.

Statistics from the Nigerian Communications Commission (NCC) showed that there are still some 115-access gaps with some 25 million Nigerians, largely in the rural areas, without basic telephony service.

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This gap has been identified in the New National Broadband Plan 2020 to 2025, which targets 70 per cent broadband penetration, covering 90 per cent of the population by 2025.

The NCC, with the support of the Ministry of Communications and Digital Economy, is poised to change the gap narrative by encouraging infrastructure development. The Commission is encouraging fibre deployment, as witnessed with InfraCos licensing, among others. NCC is also critical about satellite deployment to ensure difficult terrains are not excluded. The commission has developed a regulatory framework for commercial satellite deployment in the country.

The recent visit of a delegation from SpaceX, an American aerospace manufacturer and space transportation services company to NCC was a testament to the new drive. SpaceX presentation at NCC showed that it planned to deploy satellite service in Nigeria, though largely at the urban areas, the regulator is hoping for an expansion into the hinterland.

SpaceX, which had already launched several satellites into space, is in the process of launching a low-earth orbiting (LOE) constellation of satellites to provide low latency, high bandwidths Internet to all corners of the globe and has identified Nigeria as a critical market.

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NCC noted that while it is not averse to the entrance of new players and disruptive technologies, it would ensure that all its initiatives are geared towards deepening broadband access in the rural areas and balancing healthy competition among players.

Deliberations with NCC
At the physical meeting in Abuja, after several virtual discussions, SpaceX’s Starlink Market Access Director for Africa, Ryan Goodnight and supported by the firm’s consultant, Levin Born, the company gave an overview of its plans, expectations, licensing requests and deployment phases during the meeting.

Responding to the presentation, Executive Vice Chairman, NCC, Prof. Umar Danbatta, represented by the Executive Commissioner, Technical Services, Ubale Maska, said the Commission would work on necessary modalities to ensure that it balances the need for healthy competition vis-a-vis the entry of new technologies to protect all industry stakeholders.

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“As the regulator of a highly dynamic sector in Nigeria, the Commission is conscious of the need to ensure that our regulatory actions are anchored on national interest. “We have listened to your presentation and we will review it vis-à-vis our regulatory direction of ensuring effective and a sustainable telecoms ecosystem where a licensee’s operational model does not dampen healthy competition among other licensees,” Maska stated.

Maska reiterated the fact that the commission was keen on making necessary regulatory efforts to drive the coverage of rural, unserved and underserved areas of the country through the implementation of NNB) 2020-2025. He noted that the plan’s target of 70 per cent broadband penetration, covering 90 per cent of the population by 2025, is also in line with the government’s expectations in the National Digital Economy Policy and Strategy (NDEPS) 2010-2030.

SpaceX and competition
With SpaceX finalizing its licensing processes with NCC, the company, founded in 2002 by Elon Musk, with the goal of reducing space transportation costs to enable the colonisation of Mars, will be disrupting the Nigerian market with its technologies, even as industry stakeholders are already forecasting stiffer competition ahead of its coming.

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Analysts see SpaceX, known for innovations, compete fiercely with network providers like MTN Nigeria, Globacom, Airtel and 9mobile.

SpaceX manufactures the Falcon 9 and Falcon Heavy launch vehicles, several rocket engines, Dragon cargo and crew spacecraft and Starlink communications satellites. The company’s achievements include the first privately funded liquid-propellant rocket to reach orbit (Falcon 1 in 2008), the first private company to successfully launch, orbit, and recover a spacecraft (Dragon in 2010), the first private company to send a spacecraft to the International Space Station (Dragon in 2012), the first vertical take-off and vertical propulsive landing for an orbital rocket (Falcon 9 in 2015), the first reuse of an orbital rocket (Falcon 9 in 2017), and the first private company to send astronauts to orbit and to the International Space Station (SpaceX Crew Dragon Demo-2 in 2020). SpaceX has flown and re-flown the Falcon 9 series of rockets over one hundred times.

SpaceX is developing a satellite mega constellation named Starlink to provide commercial Internet service. In January 2020, the Starlink constellation became the largest satellite constellation in the world. SpaceX is also developing Starship, a privately funded, fully reusable, super heavy-lift launch system for interplanetary spaceflight. Starship is intended to become the primary SpaceX orbital vehicle once operational, supplanting the existing Falcon 9, Falcon Heavy and Dragon fleet.

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Regulation and impact of Satellite communications
Section 70 (2) of the Nigerian Communications Act (NCA), 2003, empowers the Commission to regulate the provision and use of all satellite communications services and networks, in whole or in part, within Nigeria or on a ship or aircraft registered in Nigeria.

According to the National Coordinator, Alliance for Affordable Internet (A4AI), Olusola Teniola, Satellite is used for many applications right from solving military to medical problems in hard to reach areas.

Teniola explained that Satellite technology was very prevalent in telecoms in the absence of wide coverage of terrestrial networks especially during the 1980s to 2008 and before the advent of the laying of additional undersea fiber cables to the shores of Lagos.

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The former ATCON boss said SpaceX offers another opportunity in addition to 5G and fibre to deliver hyper-fast broadband speeds to those that can afford to subscribe to the offerings being brought to market.

He said it is more than likely that those that live in the affluent parts of the cities will be able to now have an option to choose from. “So SpaceX will present a switching of customers from one technology to another at a price range that excludes the low-income earners or those struggling to survive on a minimum wage.”

According to him, like the war between GSM and CDMA, SpaceX may challenge the 4G and 5G advance on a per Mbps basis. “I personally foresee a situation where different business models will be created to merge the strengths of each emerging technology to deliver the customer and consumer benefits. Price will always be the determinant and affordability the key outcome and measure of acceptability.

“In the Broadband Plan it was envisioned that 4G should cover 90 per cent of the population by 2025 and that a mixture of both Satellite and 5G technology will fill the remaining 10 per cent,” he stressed.

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Regulators’s view going forward
With about 25 million Nigerians in the access gap range, NCC has identified satellite as a leading technology to provide connectivity to the people, who are mostly in rural areas.

At a telecoms forum in Abuja recently, Danbatta informed that the decision of the Commission to develop a regulatory framework for commercial satellite deployment in the country is targeted at bridging the existing digital gap between rural and urban dwellers.

According to NCC, the regulatory guideline for commercial satellite deployment is to ensure a well-developed and organised satellite communications market in Nigeria with an appropriate legal framework that meets international best practices.

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Further, the Commission said this would also encourage innovation and guarantees public safety in the rendering of commercial satellite services. Other objectives of the regulation include managing scarce frequency resource, especially in bands where the frequency is shared between satellite and terrestrial systems and encouraging the use of satellite connectivity to unserved areas that lack terrestrial transmission infrastructure backbone; encouraging the use of satellite communication infrastructure in Nigeria as a means of providing long-haul transmission facilities; providing guidelines for protection from impermissible levels of interference to the reception of signals by earth stations in the fixed/mobile satellite service from terrestrial stations in a co-equally shared band and ensuring that satellite space segment providers, earth station service providers, bandwidth re-sellers and vendors of terminal equipment or franchise holders, provide reliable, cost-effective and secured service to users in Nigeria under fair and favourable commercial and technical conditions.

Since the beginning of the enforcement of the regulation, there has been a renewed interest in commercial satellite deployment in Nigeria by operators from across the world. In the last year, the commission said it had granted landing permits to 55 space stations that are providing satellite communications in the country.

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