Regulator: Upcoming spectrum auction rings mobile broadband for Rural Nigeria

[dropcap] T [/dropcap]he Nigerian Communications Commission (NCC) says that the 2.6 GHz frequency spectrum to be auctioned by the telecoms regulator will extend mobile broadband to rural areas across the country.

Mr Tony Ojobo, Director of Public Affairs at NCC disclosed this in an interview with Technology Times at the sideline of the Stakeholders Forum on the Licensing of the 2.6 GHz Frequency Band Post Mortem, hosted by the Commission at the Sheraton Hotel, Lagos. “We had 2.6 GHz spectrum auction sometime this year, and we did not get the kind of response that we expected from the industry stakeholders. In fact, there was only one service provider, that is MTN. And so we are wondering at the Commission, why is it that we did not have the kind of participation we usually have? That is why we have this forum today", Ojobo, Director of Public Affairs at NCC says.

Ojobo says that there is a need to also boost quality of service delivery to the consumers and make data very affordable thus improving data communication throughout Nigeria.

According to the NCC Director of Public Affairs, “you notice that if you are in some location for instance and you want to make use of the Internet, you find out that you are not able to do anything because the 3G networks are not available everywhere. They are mostly in the cities. So we believe that with this kind of spectrum coming in addition to what we have already, we can have services penetrate into rural areas and have all Nigerians having access to the Internet.

“You of course know right now that data services are very important; they are becoming a part of our lives. When we started in 2001, basically is voice, people were just interested in voice communication. But as you can see right now, a lot more people are doing things on data. Especially with e-business that is going on in area of banking, in area of shopping and in all areas as a lot of things are done on the Internet and we have about 97 million Nigerians on the Internet. So that is pretty huge.”

[caption id="attachment_51998" align="alignleft" width="623"] Mr Tony Ojobo , Director of Public Affairs, NCC, speaking at the Stakeholders Forum on the Licensing of the 2.6 GHz Frequency Band Post Mortem held at the Sheraton Hotel, Lagos.[/caption]

Ojobo also says that “the data requirement is pretty high and we believe that if we are able to get this right and have a lot more players playing on that area, we are going to see its impacts in terms of pricing, in terms of the quality of service delivery to the consumers and in terms of how pervasive you have this data communication throughout Nigeria.”

The NCC image maker says the spectrum auction done by the Commission some months ago did not get the expected response from telecoms industry stakeholders, which underscored the need for the telecoms regulator to organise a fresh stakeholders' forum to understand the reason for the low response from its industry stakeholders.

“We had 2.6 GHz spectrum auction sometime this year, and we did not get the kind of response that we expected from the industry stakeholders. In fact, there was only one service provider, that is MTN. And so we are wondering at the Commission, why is it that we did not have the kind of participation we usually have? That is why we have this forum today", Ojobo says.

For the Director of Public Affairs at NCC, the forum is “a kind of a post-mortem of a 2.6 GHz spectrum auction, with a view to ascertaining and eliciting response and feedback from the industry on may be whether there are some things that we ought to have done that we did not do. So from all of the feedback today, you can see that there is need for us to go back and look at our process and see how we can carry out in such a way that we would get the kind of response that we want.

“Our desire in the Commission is to make sure that this industry continues to grow, and as a regulatory body we have to be responsible and responsive to not just the consumers but also the operators. We want to see this growth continue and also impact on the quality and service and the variety of services that the Nigerian consumers have access to.”

[caption id="attachment_51996" align="aligncenter" width="5200"] A cross section of attendees at the the Stakeholders Forum.[/caption]

Earlier while delivering the opening remark at the event, Mr. Ojobo, representing Professor Umar Danbatta, the Executive Vice Chairman of NCC, says the licensing of broadband frequency spectrum has contributed to the growth of number of telecoms subscriber to grow “from less than 500,000 as at January 2001, to 152 million as at August 2016.”

According to NCC, the efficient and effective licensing and leasing of frequency spectrum have been the key drivers of the growth that have actually occurred.

“Some other progress has been made which has addressed voice communication and of course with increase in mobile penetration to as much as 107%. The Commission, in line with the objective of National Broadband Policy, aims to increase broadband penetration across the country to 30% by 2018. The latest statistics from the Broadband Commission of the ITU, in collaboration with UNESCO indicates that as at July 2016, we have achieved 20.9% broadband penetration,” Ojobo says.

For the telecoms regulator, “the catalytic impact that the growth of the telecoms industry has had on the Nigerian economy has been quite profound. This positive impact can be accelerated with the deployment of broadband across the nation as most Nigerians today access the Internet via the wireless space is critical.”

He says that, “it is in line with this objective that the Commission recently conducted an auction for the available slots in the 2.6 GHz spectrum band. The Commission, in consonance with this practice of collaborative regulation, seeks to get useful industry feedback on the auction for the aim of ensuring effective and efficient utilisation of spectrum bands for the delivery of broadband Internet across the nation.”

On his part, Mr Ikenna Ikeme, Director Regulatory and Corporate Social Responsibility at Etisalat Nigeria, while commenting on the previous 2.6 GHz spectrum band auction by NCC, says the reason for the poor response from telecoms operators was because the spectrum offer was "too expensive."

The Federal Government of Nigeria, through the NCC early this year flagged off the race to sell 14 licences in the 2.6GHz band, the frequency spectrum expected to power the delivery of broadband services across the country.

Nigeria offered 14 broadband licences at a total $224 million when they were put up at the previous frequency spectrum auctions.

The auction of 2.6GHz frequency spectrum, offered at a reserve price of $16 million in the spectrum auctions, will allows the winner to use them in offering broadband services in Nigeria.

Four months, ago NCC announced MTN as the winner of six lots out of the available 14 lots in the 2.6GHz spectrum space but some telecoms operators have faulted the auction exercise. According to him, before NCC came out with the reserved price, there was valuation. “We did benchmark, and again factored in our own peculiar circumstances. We did a price per GHz based on different other administrations and I tell you that the one from Nigeria is nowhere in the middle. It is below the average, very much below the average.”

According to the Etisalat exec, the high cost coupled with economic challenges facing the country today, ''made it difficult to invest in the sector.''

According to him, “are there more efficient ways of providing the 4G services by utilising the 2.6 GHz band? Is 2.6 GHz what we should be looking at right now, considering the challenges we have in the sector or should we be looking at cheaper spectrum band to utilise? Should 2.6 GHz be sold alone, or should it be sold with some other lower spectrum band? These are things that are critical that I think we need to look at because if it will be cheaper for me to use another spectrum band, then why will I want to use 2.6 GHz, because it is very expensive.”

Ikeme, the Director Regulatory and Corporate Social Responsibility at Etisalat Nigeria, while commenting on the spectrum auctions at the Stakeholders Forum says that industry stakeholders “should be looking at the ability to access local funding, it’s also a big local challenge. Because you know what is happening to the banks. So outside being able to attract foreign investments, even to attract local funding for certain transaction within the country is a very big challenge.”

According to him, “the truth is that operators are in an environment where things are really tough, and it is difficult for you to invest in the sector if you are not able to grow out of it. So, if you don’t have deep pockets, which means in essence that you are not able to pull out investment from the sector you are playing in, then it becomes impossible for you to invest, either from your cash flow, or even to look attractive to a foreign investor for a local brand that wants to give the funding. So it’s very important to give thought to that.”

For the Etisalat Nigeria Director, “another thing to look at is: How can the Universal Service Provision Fund (USPF) try to push the services to the underserved areas? Operators have contributed a lot to this USPF and we feel that there is a need for us to look at more efficient ways of trying to utilise those funds to try and support the industry. Even if it is with regards to making the cost of acquiring this spectrum very low, and also trying to support its roll out particularly in trying to push some services in some areas that are currently not having the services or underserved areas.”

[caption id="attachment_51997" align="alignright" width="531"] Engr. Austin Nwaulune, Director of Spectrum Administration at NCC[/caption]

While responding to issues raise by the stakeholders regarding the pricing of the spectrum, Engineer Austin Nwaulune Director of Spectrum Administration at NCC says the International Telecommunication Union helps in ensuring that the rules for the use of the spectrum, which is though a national resource, are harmonized and put to better technological use.

According to “the price is determined by individual countries based on their own peculiar circumstances and situations. Spectrum is international; therefore, you are not taking yourself outside the international circle even in determining the price. But are we going to be selling the spectrum because U.S. is selling it at a particular price then we sell it at that price? No. Because we have our peculiarities.”

According to him, before NCC came out with the reserved price, there was valuation. “We did benchmark, and again factored in our own peculiar circumstances. We did a price per GHz based on different other administrations and I tell you that the one from Nigeria is nowhere in the middle. It is below the average, very much below the average.”

He also hinted that on November 29, the Commission will meet with stakeholders to discuss with them on aspects of spectrum trading and sharing.

“We want to see what should be done to the regulation on the guideline that centres on passive infrastructure sharing. We want to see what needs to be done, what needs to change to accommodate certain other developments that are both national and international,” the NCC Director of Spectrum Administration assured.