The successful emergence of Bitflux Limited, the new entrant sole wholesale broadband company that staked a winning bid of $23.251 million for the 2.3GHz spectrum in last year’s auction is a boost for ‘Nigerian Content’ in the telecommunication market, the industry regulator has said.
“The successful completion and conclusion of this auction is also the Commission`s initiative to support Nigerian Content development in order to encourage the delivery of broadband wireless access service at the wholesale level, provide ISP’s and other Retail Telecoms Service Providers with the requisite bandwidth to service their subscribers”, Dr Eugene Juwah, the Executive Vice Chairman of The Nigerian Communications Commission (NCC) in his post mortem of the auctions held February 19, 2014 in Abuja.
The Nigerian Content policy thrusts broadly aims to increase indigenous participation in key sector of the economy; build local capacity and competencies;
create linkages to other sectors of the national economy and boost industry contributions to the growth of our National Gross Domestic Product, among others.[su_quote]Juwah also cites a World Bank report that also noted that “the effect of broadband in accelerating economic growth was greater in less developed countries like those in sub- Saharan Africa than in more developed countries, and more than for fixed, mobile or Internet penetration.” According to him, “with about nine terabyte of undersea cable capacity at the shores of Nigeria there is still not enough capacity inland to support faster and high speed broadband.” [/su_quote]
Around this time last year, Bitflux won the licence when to emerge winner of the 2.3 GHz spectrum with the higher bid of $23, 251,000, beating Globacom, the second national operator (SNO) that offered $23, 050,001.
Juwah says that the outcome, which not only supports the Nigerian Content drive of the Federal Government, it also consolidates the position of the telecom regulator as a fair industry watchdog.
“The NCC understands that providing the enabling environment to support Nigerian Content makes good business sense and yields sustained benefits both for the Country and the Operator because it generates employment opportunities, opens a new vista of investments, encourages infrastructure build out, and provides opportunities for learning and development”, Juwah adds noting that entry of the new wholesale broadband provider will also have socio-economic impact for the economy.
According to the telecoms regulator, “broadband is widely perceived as a development enabler. It transforms the society and generally brings about economic well-being. This much was alluded to in the Nigerian National Broadband Plan 2013-2018 that stated inter alia “We live in a global village where ICT has a direct impact on a Nation’s ability to improve the economic wellbeing of her people and compete globally. Broadband is an essential infrastructure of the 21st Century. It enables access to business and job opportunities, improves healthcare, education and government services, and facilitates social interactions.”
Juwah also cites a World Bank report that also noted that “the effect of broadband in accelerating economic growth was greater in less developed countries like those in sub- Saharan Africa than in more developed countries, and more than for fixed, mobile or Internet penetration.”
According to him, “with about nine terabyte of undersea cable capacity at the shores of Nigeria there is still not enough capacity inland to support faster and high speed broadband.”
Juwah adds that, “this is because there is inadequate metropolitan fibre connection, haphazard infrastructure layout and a seeming evaporation of the last mile. However, with the triple initiatives of the NCC sale of the 2.3 GHz, the proposed licensing of Infracos and the implementation of Open Access Model, shall obliterate and reverse this infrastructural deficit with the following attendant impacts; Employment Generation, Positive increases on the Country`s GDP, Highly knowledgeable society, Improved Access to and effective Public sector businesses, High Return on Investment support and development of local content in Nigeria.”
According to NCC, 19 companies initially expressed interest in the spectrum auction but only two companies, Bitflux Limited and Globacom were pre-qualified after paying the initial deposit of $2.3 million, representing 10 per cent of the bid reserve price.
“Both companies exhibited deep and rich Nigerian content” with the biddings lasting 30 minutes of 15 minutes per round. At the end of the first round, both companies were unwilling to bid beyond the reserve price, hence round 1 was a tie at the bid reserve price of $23, 000,000.00.
At the second round, Bitflux increased the reserve price by 1.09% to arrive at a bid price of $23, 251,000 while Globacom increased the reserve price by 0.22% to arrive at $23, 050,001, the last stroke and higher stake that was to make Bitflux emerge winner of the 2.3 GHz spectrum.