INTERVIEW | Paul Usoro ‘revisits’ Nigeria mobile licence auction of 2001

INTERVIEW | Paul Usoro ‘revisits’ Nigeria mobile licence auction of 2001

INTERVIEW | Paul Usoro ‘revisits’ Nigeria mobile licence auction of 2001

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Mr Paul Usoro (SAN), the only Nigerian legal counsel in the Nigeria digital mobile licence auction in 2001, speaks on the landmark spectrum sale in an exclusive interview with Technology Times


Mr Paul Usoro, (seen in the middle of photo above), Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), a full-service commercial law firm in Nigeria in the interview with Technology Times team of Kolade Akinola (left) and Shina Badaru, on the right at his Victoria Island home in Lagos
Down memory lane: Mr Paul Usoro, (seen in the middle of photo above), Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), a full-service commercial law firm in Nigeria in the interview with Technology Times team of Kolade Akinola (left) and Shina Badaru, on the right at his Victoria Island home in Lagos.

 

PAUL USORO (SAN)
Brief BioData
Brief BioData

Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), a full-service commercial law firm in Nigeria that provides legal services to leading companies, international organisations and institutions as well as public agencies and governments.

Usoro’s law firm, PUC, acted as Legal Consultants to the Nigerian telecom regulator, (Nigerian Communications Commission (NCC) and was the only Nigerian firm (legal or otherwise) on the Auction Control Team.

The first ever DML Auction was to introduce Econet (now Airtel), MTN Communications Limited and NITEL GSM to the Nigerian market and fetched Nigeria $285 million for each of three Digital Mobile Licences.

In this role, PUC had responsibility for carrying out due diligence exercise on the prospective bidders, review and modification of Information Memorandum, drafting and advising on the auction documents, the process and the rules governing the auction, as well as drafting and finalising the Digital Mobile License awarded to the successful bidders at the Auction.

The DML Auction remains widely-acclaimed as a watershed in Nigeria’s communications landscape and history.


Technology Times: About 15 years ago, Nigeria successfully completed the auction of digital mobile spectrum and you were part of the landmark transaction. What’s your memory of that landmark event in the history of telecoms in Nigeria?

Paul Usoro:  It was outstanding. Any other thing that has come after that has actually being as a result of that specific activity. The only way to appreciate this landmark event is to look back before the auction. That is, what telecoms was like before and many years after the auction. The difference is very stark. If you look at the days where NITEL was the only operator and people had to queue up for several hours just to speak with their loved ones, then we would really appreciate the auction.

The spin-off of that exercise was phenomenal and I feel gratified that I was involved in it. I was the only legal counsel involved in it.

That auction, if we really have to go at a broader scale, you will see that telecommunication has not only helped in the development of Nigeria’s economic perspective, but also in the aspect of fighting crime.

It has become very critical and you could measure it from the fine imposed on MTN and the question is, why was Subscriber Identification Module (SIM) registration made compulsory? The reason it was made compulsory was simply because it helps in fighting crime, and for national security, particular in a moment where violent crime has become a persistent problem in Nigeria. That on its own shows the importance of the exercise 15 years ago and its potentials to help Nigeria to build a better society.

The spin-off of that exercise was phenomenal and I feel gratified that I was involved in it. I was the only legal counsel involved in it.

Mr Paul Usoro, (seen in the middle of photo above), Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC).
The auction remains a watershed…Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC).

In the auction itself, aside the Executive Vice Chairman of Nigeria Communications Commission (NCC) at that time, Dr Ernest Ndukwe, I was the only Nigerian that was involved in the auction control team.

The Bureau of Public Enterprise (BPE) at that time struggled and wanted to take charge of that exercise, they took all our documents, scrutinised it but they could not find anything.

I have the singular honour to be the face of the auction. I had to be the one who interfaced with the bidders and my involvement was not only limited to the auction. We broke it into multiple parts. There was the pre-auction, auction and grant stage and each of these have raft of activities and since that was the first time we are having an auction in Africa, we had to be sure that everything was right and the process was robust.

In fact, the documentation was robust such that 15 years down the road nobody, has been able to puncture the documentation of the process of that auction.

The Bureau of Public Enterprise (BPE) at that time struggled and wanted to take charge of that exercise, they took all our documents, scrutinised it but they could not find anything.

The good thing about it was that the process was not only robust but transparent. If there is a will, there is always a way to achieve it. That particular process was transparent and that is why it is acclaimed and still intact 15 years down the road as a signpost everybody can use.

Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), seen in photo above inside his home, says that the auctions that introduced the big mobile operators into Nigeria has changed the economic landscape for the better
Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), seen in photo above inside his home, says that the auctions that introduced the big mobile operators into Nigeria has changed the economic landscape for the better.

Technology Times: We remember that the international investment community was slightly circumspect about participating in the auction then, Also, some indigenous players were a bit reluctant in also participating. What was your experience back then?

Paul Usoro: I do know that today some international telecoms companies have expressed several regrets in not taking part in that auction and have not been able to get into the Nigeria telecoms market.

There are some that have expressed those regrets to my knowledge and that’s symptomatic of the skepticism that they had at that time, which was the restraining factor that made them not to be able to join.

I do know that today some international telecoms companies have expressed several regrets in not taking part in that auction and have not been able to get into the Nigeria telecoms market.

Nobody was sure that the auction could be successful. Many of them believed that if the auction were successful, is the government willing to implement it to keep to the letter of what the licence says it should happen?

When these players have seen how successful the auction was, some of them attempted to come into the Nigerian market and some of them have also expressed regrets that they were not part of the process.

Hindsight they say is 20:20. If some of them should have the hindsight to see into the future, definitely they would have rushed to be involved in the process.

NEXT PAGE: Paul Usoro on Keem Belo-Osagie/Orascom pullout of the auctions:  “I know that Orascom after the auction made some feeble attempt to come into the Nigerian market which was not possible at that time.”

Orascom missed the Nigeria mobile phone gold rush, Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), tells Technology Times in the exclusive interview
Orascom missed the Nigeria mobile phone gold rush, Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), tells Technology Times in the exclusive interview.

Technology Times: With the benefit of hindsight also, there was an interesting development that happened then. The current Chairman of Etisalat Nigeria, Hakeem Bello-Osagie, who bidded alongside Orascom, said they would not bid anything above $200 million. But several years down, that same person (Hakeem Bello-Osagie) bought the same licence for $400 million. What do you make of that?

Paul Usoro:  It still goes around to the same thing. Two things were involved: if perhaps the partners (Orascom) had seen into the future they would have stuck and would have gone through the process and perhaps the winner of the auction.

Secondly, if the Arabs who also had money at that time also had seen what the landscape played out, they themselves would have come in to bid for the licence. So, neither the Arabs nor Orascom saw into the future. I know that Orascom after the auction made some feeble attempt to come into the Nigerian market which was not possible at that time.

Secondly, if the Arabs, who also had money at that time, also had seen what the landscape played out, they themselves would have come in to bid for the licence. So, neither the Arabs nor Orascom saw into the future. I know that Orascom after the auction made some feeble attempt to come into the Nigerian market, which was not possible at that time.

As at the time of the auction the NCC Act wasn’t in place. So, there was still a need to institute a proper framework that will be acceptable internationally. So, the Nigeria Communication Act was put together in 2003.

It is a tribute to that piece of legislation, 12 years after, not quite typical of Nigeria, nobody has found something to amend as far as legislation is concerned because it has proved to be very durable, effective and useful for the purpose of regulating the industry.

Paul Osoro on Mike Adenuga Jnr’s licence controversy: “The record of NCC shows that CIL didn’t meet the timeline and the government at that time were quite strict on this matter. I believe that the government had to be very strict because this was the first auctioning and there was the anxiety by the international audience to see if NCC keeps to the rules or not.”

Technology Times: There was this tense moment of the investment vehicle of Mike Adenuga through CIL (Communication Investments Limited) which laid claim to having met the terms of the licensing but then made allegations that it was denied the licence. For the benefit of hindsight today, what happened back then? What can you say about Adenuga’s charge to government?

Paul Usoro: The record of NCC shows that CIL didn’t meet the timeline and the government at that time were quite strict on this matter. I believe that the government had to be very strict because this was the first auctioning and there was the anxiety by the international audience to see if NCC keeps to the rules or not. And the government was interested to show that it will be transparent even though it was going to be a painful process. Painful in the sense that CIL was the only 100% indigenous company, but the good story is that some years after, Globacom came on board.

The CIL matter was painful, Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), tells Technology Times in the exclusive interview
The CIL matter was painful, Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), tells Technology Times in the exclusive interview

NEXT PAGE: Paul Usoro on why PTOs died in the Nigerian telecoms market:  “Many times, we lack patience of growing things in Nigeria and many Nigerian investors want quick cash. Some of them (PTOs) didn’t look at it at as a long-term investment. That is why they look for people to buy them after a short time.”

Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), seen inside his home during the Technology Times interview, says the DML auction remains a watershed in Nigeria’s communications landscape and history
Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), seen inside his home during the Technology Times interview, says the DML auction remains a watershed in Nigeria’s communications landscape and history

Technology Times: We have seen today that gradually or rapidly what you could call indigenous participation in Nigerian telecoms industry has been significantly eroded. The first generation of Private Telecommunication Operators (PTO) that came immediately after the deregulation are no longer functional or have been acquired. What do you think was responsible for that trend?

Paul Usoro: Cost of telephony was humongous. Even the ones that claim to be local, only few of them were truly local. For example, Starcomms was not strictly local. The financial muscle was not local same as Multi-Links. I think the only one that you could largely say is local is Intercellular. But even then, the cost was enormous that to a large extent and the inability of Nigerians to attract long-term finance.

Those who could get international finance were very small and that was quite a challenge and that challenge has not totally disappeared as at today.

The other aspect is that there are niche of things Nigerians could do particularly in the communication space and some of them don’t particularly require huge finance. What you really require is more of your brain work and skills. It is possible for Nigerians to start exploring those opportunities and start building them and over time it grows.

Another thing is that many of them didn’t look beyond the Lagos market. Even those that had the licence to grow beyond Lagos. When you focus in only one location, you become a sitting duck particularly when the giant operators come in and roll out their network nationwide and you find out your subscribers moving to these networks.

Many times, we lack patience of growing things in Nigeria and many Nigerian investors want quick cash. Some of them (PTOs) didn’t look at it at as a long-term investment. That is why they look for people to buy them after a short time.

Another thing is that many of them didn’t look beyond the Lagos market. Even those that had the licence to grow beyond Lagos. When you focus on only one location, you become a sitting duck particularly when the giant operators come in and roll out their network nationwide and you find out your subscribers moving to these networks.

Mr Paul Usoro, (seen on the left of photo above), Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), in the interview with Technology Times team of Kolade Akinola (right) and Shina Badaru, on the left at his Victoria Island home in Lagos
Mr Paul Usoro, (seen on the left of photo above), Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), in the interview with Technology Times team of Kolade Akinola (right) and Shina Badaru, on the left at his Victoria Island home in Lagos.

Technology Times: We have seen a significant shift from voice to data and operators are leveraging on that as the next growth area for their business. As a matter of fact, the Ministry of Communications came up with a National Broadband Plan for creating ubiquitous broadband across Nigeria. How do you think they can borrow from the success from the mobile telephony space?

Paul Usoro: I was at the Communication Retreat in Ibadan two days ago. In fact, that was the area I talked about from the legal/regulatory perspectives. There are a couple of things that I pointed out for us to have that ubiquitous broadband roll-out.

First of all, we need to have cross sectoral linkages, that is linkage between communication to power to education and so on.

For example, mobile operators need constant power supply to effectively run their businesses. Also, mobile users need power to keep their devices on such that they don’t have challenges surfing the Internet.

I will also take you to another level of linkages between different levels of government. There are a lot of Directors and senior officials who think computer hurts. They don’t know how to use computers.

Another example is the ICT (information and communication technology) and educational sectors, where you find out that majority of students in public schools are not trained on ICT.

I will also take you to another level of linkages between different levels of government. There are a lot of Directors and senior officials who think computer hurts. They don’t know how to use computers.

The ICT policies are brilliant and well documented. However, there are no measurable targets. When you don’t have timelines, then you are not under any pressure to achieve your objective. There should be reporting process where what you have achieved are published.

Another key issue which I pointed out was harmonisation of the industry. The Nigeria ICT sector needs to be harmonised in order to attain lofty height.

Technology Times: Talking about harmonisation, one of those highly debated issue about convergence is NCC and NBC. Some analysts have said those two regulatory agencies should be converged into a single entity. What’s your perspective?

Paul Usoro: I have always been an advocate of convergence. At this time government is looking for money, I think convergence is one of the ways out because it will minimise cost of governance.

Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), seen during the Technology Times interview, says that Nigeria will inevitably have to embrace convergence
Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), seen during the Technology Times interview, says that Nigeria will inevitably have to embrace convergence

If the two regulatory bodies could merge and they can speak with one voice, I think we would scale new heights. Recently, one of the regulators is complaining that the other regulator has given a spectrum to a service provider. You don’t need to fight. What we need is just to have a single regulator that manages the whole process.

Technology Times: Do you think NBC was right or wrong to have issued a portion of the digital dividend spectrum to MTN Nigeria?

Paul Usoro: Let me not get into that specific. But the point I am making is that dispute may have been avoided if you have a converged regulator because that converged regulator would have been the one managing that entire spectrum for the communication sector.

Technology Times: Opinion has been divided on MTN’s acquisition of Visafone. What’s your take on it?

Paul Usoro: The fact that MTN wishes to use Visafone spectrum for LTE, that is a laudable initiative and will benefit the end users and of course other service providers will start looking for ways to attain the same objective.

Where anxiety comes in is that MTN has been named the dominant operator. But for me, the relief is that we have a regulator that determines what regulation needs to be put in place to ensure the dominant operator does not use its dominance to oppress others.

The fact that MTN wishes to use Visafone spectrum for LTE, that is a laudable initiative and will benefit the end users and of course other service providers will start looking for ways to attain the same objective. Where anxiety comes in is that MTN has been named the dominant operator.

Technology Times: There has been anxiety expressed over the fine imposed on MTN by NCC with respect to the fact that the fine was humongous. From your own legal perspective, what’s truly were the details of how the humongous sum of money was arrived at and what’s your take on it?

 

NEXT PAGE: Paul Usoro on Nigeria fine:  “I should expect that any company should have mitigated against those risks. If you are negligent to have defaulted to the extent that that humongous fine is imposed on you, I think you should start by blaming yourself.”

Mum is the word….Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), during the Technology Times interview, says “Let me not get into that specific. But the point I am making is that dispute may have been avoided if you have a converged regulator because that converged regulator would have been the one managing that entire spectrum for the communication sector.”
Keeping mute….Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co, (PUC), during the Technology Times interview, says “Let me not get into that specific. But the point I am making is that dispute may have been avoided if you have a converged regulator because that converged regulator would have been the one managing that entire spectrum for the communication sector.”

Paul Usoro: As you are aware, the case is in court. So my comment on it will be limited. If you look at the regulation that MTN have been alleged to have flouted, the regulation says when you have a SIM that is not properly registered and there is a description on how it should be registered and for each SIM that is not properly registered attracts N200,000. That regulation was made in 2011.

For me, from the legal perspective, the service provider has a choice from 2011 to determine the number of SIMs it will register. So, it should not lie in the mouth of the service provider when the number of unregistered SIM is multiplied by the penalty that is provided.

For me, from the legal perspective, the service provider has a choice from 2011 to determine the number of SIMs it will register. So, it should not lie in the mouth of the service provider when the number of unregistered SIM is multiplied by the penalty that is provided.

I should expect that any company should have mitigated against those risks. If you are negligent to have defaulted to the extent that that humongous fine is imposed on you, I think you should start by blaming yourself.

Technology Times: What do you see as the road ahead of the telecoms sector in Nigeria?

Paul Usoro: Natcoms paid several billions to acquire NITEL. If they didn’t see any opportunity, they wouldn’t have paid that much. So, that means there is a lot of opportunity that needs creative thinking.

If the government keeps to its promise especially on power, then of course some recurrent expenditure will reduce and investors can invest more in the sector.

I am optimistic that government will keep to the side of its bargain and as the sector of the economy grows, of course ICT, which is the vehicle for the growth of other sectors of the economy, will definitely grow.

“Natcoms paid several billions to acquire NITEL. If they didn’t see any opportunity, they wouldn’t have paid that much. So, that means there is a lot of opportunity that needs creative thinking” Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co (PUC), says during the Technology Times interview.
“Natcoms paid several billions to acquire NITEL. If they didn’t see any opportunity, they wouldn’t have paid that much. So, that means there is a lot of opportunity that needs creative thinking”, Mr Paul Usoro, Senior Advocate of Nigeria (SAN) and Senior Partner, at Paul Usoro & Co (PUC), says during the Technology Times interview.
Kolade Akinola Technology Journalist at Technology Times Mobile: + 234 (0) 807 401 6027

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