NCC defends integrity of licensing process against alleged spectrum racketeering

By Olubunmi Adeniyi

Lagos. October 16, 20212: The Nigerian Communication Commission has defended the integrity of its licensing process in reaction to recent allegations that the nation’s telecoms umpire was involved in frequency spectrum racketeering in favour of some companies.

NCC says it is giving its side of the story on the issue of licenses and frequencies allocated to OpenSkys and Smile Communications Nigeria Limited to provide accurate information to the general public and industry stakeholder,

Tony Ojobo, Director, Public Affair, NCC, says the attention of NCC has been drawn to different versions of stories being published by Leadership Newspapers, specifically those of October 4 and 5, 2012 on licenses and frequencies granted to the telecoms companies.

In defending the telecoms regulator, Ojobo says the response “has become necessary, given the deliberate exaggerations and unmitigated accusations made by the authors of the news stories against the Commission.”

The NCC spokesman says the allegations that spectrum were fraudulently issued to the two companies are false noting that frequency allocation in NCC follows due process guided by provisions of the NCC Act and in line with global best practices.

Frequency allocation to OpenSkys was not only in compliance with the Nigerian Communications Act, but also in full implementation of a Presidential directive of July 5, 2007 he adds noting that, “the insinuation that the frequency issued to Police has been sold to OpenSkys is false, the frequencies allocated to the company are commercial frequencies designated for such services in all parts of the world. The frequency to which the Police was relocated was designed for security related services.”

Ojobo notes that the Presidential directive to the commission was for allocation of a portion in the 450MHZ to Nigerian Communication Satellite Limited (NigComSat).

The NCC Board however gave considerations regarding issuance of such licence to a government agency and thereafter gave NigComSat, the government-owned satellite services provider a pre-condition to seek private partnership to qualify for such allocation.

Upon confirmation of partnership with OpenSkys by NigComSat, the NCC management began the process of the assignment from 2008 Ojobo says clarifying that as at October 2009 when the regulator made a provisional offer of frequency to the telecoms company, the Nigerian Police was still occupying some of the frequencies in the 450MHz band.

After the use of 450MHz for commercial telecommunications was approved by the National Frequency Management Council (NFMC) on November 5, 2004, occupants in the band like the Nigeria Police, Nigerian Telecommunication Limited (NITEL), Shell, Chevron and among others were relocated to specific portions of the band suited for their types of service and usage.

Ojobo says that following the review of the status of the offer made a provisional offer to OpenSkys on the condition of payment of N247, 544,989.40 for replacement of digital radio equipment of Nigerian Police that may result from the relocation.

“OpenSkys was also to pay the sum of N892,455,010.60 to the commission representing the balance of the spectrum fees for the offer. Frequency fees are paid into the federation account. The total spectrum fees for the 5MHz spectrum for a tenure of 5 years is N1,140,000,000”, he adds.

He goes further that in 2011 and upon completion of frequency fees, NCC offered the telecoms company a letter of frequency assignment detailing the channels in line with the provisional offer of October 2, 2009 with a condition that roll out would commence only on fulfillment of the regulator’s  directives on the relocation of Nigerian Police and submission of certificate of completion and also securing an operational licence which as a minimum should be a within the categories of Digital Mobile License (DML) plus Private Network Links (PNL).

While also addressing the frequency transaction with Smile Communications Ojobo adds that on July 1, 2009, the telecoms company was awarded three different licences namely: Universal Access service License (UASL), PNL National Licence and Spectrum Licence in the 850MHz band in 2009.

Smile Communication was granted UASL and spectrum licences with 10 years validity in July 2009, being due for renewal on July 1, 2019, says Ojobo while adding that the company paid N320, 250,000, N46, 830,000 N2, 154,600,000 for UASL, PNL and Spectrum licenses respectively.

“The total amount paid to the commission in 2009 by the telecoms company for its operations amounts to N2, 521,680,000. For an addition 5MHz, Smile paid N718, 200,000 and altogether paid a total of N3, 239,880,000 for ten year license they acquired in 2009,” Ojobo adds.

“Smile Communication was licensed to provide broadband multimedia services on the 850MHz band nationwide. It was assigned 15MHz spectrum based on Time Division Duplexing (TDD) in the 850MHz band to provide wireless access services.”

Ojobo adds that, “the company in a letter dated March 23, 2010 had appealed to the commission to convert their 15MHz TDD assignment to 10MHz Frequency Division Duplexing (FDD), by assigning appropriate return leg to their assignment. Smile had adduced technology trend and avoidance of obsolescence as part of what informed their decision for the application.”

Ojobo adds that initially the frequency slot was planned for TDD as there was no corresponding return leg for FDD and that was why they chose the TDD but eventually the band was re-planned for FDD, adding that as at that time of Smile Communication’s request, no other application was received for TDD and there was no service in the band.

On the administrative spectrum allocation, he says that there are more allocations awarded administratively without auction process than those awarded by way of auctions.

The NCC spokesman says that some of the frequency allocations done without auction include those issued in the 800MHz band to Multilinks, Intercellular, Prestel, Megatech, Odu’a Telecom and Rainbownet; in the 1800MHz, Etisalat; in the 1900MHz, Starcomms, Multilinks, Reliance Telecom, MTS First Wireless, NITEL; in the 2.2GHz, iPNX, Imperial; in the 2.3GHz, Direct on PC, in the 2.5GHz.

According to him, “we still have companies licensed by Nigerian Broadcasting Commission (NBC), in the 5.4GHz ANAS and several Internet Service Providers (ISPs); in the 10.5GHz, MTN and Gateway/Vodacom and in 26GHz, MTN.”

According to him, pursuant to sections 123 (2) and 33 (3) of the NCC Act, the Commission at different times has applied various licensing mechanisms including the following methods: first come first served, auction, beauty contest/comparative, administration/ fixed price or a combination of two of some of the above.

The impression being created that auction is the only process that must apply in the allocation of frequencies by the commission is false, says Ojobo clarifying that contrarily, NCC has the right to determine prices and which processes to adopt for any type of licensing.