IT industry stakeholders seek review of NCC spectrum license terms

Despite the fact that the Nigerian Communications Commission (NCC) signed legal and binding contractual agreements with bidders of the previously auctioned 2.3GHz spectrum frequency to make use of the spectrum for broadband roll out within one year of licensing the winners, industry watchers say that there may be need for terms of conditions of the contract to be reviewed.

This they say, is as a result of the current harsh operating environment in the country, especially the recent restriction and scarcity of foreign exchange which indigenous winners deem necessary to obtain needed infrastructure for broadband roll out.

The NCC recently announced plans to auction a 2.6GHz spectrum on May 17- 19 2016, giving prospective license winners the same conditions as previous spectrum winners of  one year to commence use of spectrum for broadband roll-out.

The information of memorandum (IM) states that winning bidders must roll out modalities and preparation from the date of license award and spectrum must be used for broadband roll out in 1 year. Although the IM also says that winning bidders are required to negotiate their own interference agreements with adjacent users particularly at collocation and should investigate before agreeing to all terms and conditions, Biodun Omoniyi, Chief Executive Officer, Bitflux Communications Limited, winners of the 2.3GHz spectrum told BusinessDay in an interview that the operating environment has changed from the time of winning over two years ago and that the company did not foresee the current foreign exchange restrictions and scarcity.

According to him, foreign exchange scarcity makes it almost impossible for local operators to meet the one year target as procurement of necessary infrastructures needs to be sourced with forex.

“We local operators don’t earn dollars and you all know that the needed equipments are brought in from foreign countries, so where are we supposed to get money to procure those equipments? Scarcity and restriction of foreign exchange contributed to some of the delays that we experienced initially,” Omoniyi said.

“It is true that it has taken us quite some time but essentially, what is worth doing is worth doing well and looking at how far we have come, it is actually an indigenous company and you know that the environment is very harsh.

“We have made necessary applications to the right quarters about what caused our delay, we have signed contracts a while ago but we needed to fund it using foreign exchange which was unavailable,” he added.

Speaking at an interactive session with journalists, Austine Nwaulune, Director, Spectrum Administration, NCC, said that the commission would make sure that the one  year deadline for service roll out is strictly adhered to by winners of this spectrum frequency.

“The industry is so much in need of this service that we cannot afford and we will not accommodate any such delays and we have stated it very clearly that it will be strictly enforced.

When asked about previous spectrum license winners who were yet to roll out facilities several years after the one year deadline had expired, Nwaulune said; “ If we have been having cases where operators ignored the one year deadline, this would be the last time it would happen because we have strict rules now and failure to adhere would result in the licenses being withdrawn from the winners.

“This is because we intend for the whole nation, that is the six geo-political zones of the country to be covered in eight years,” he added.

The roll out, coverage and service obligations for the latest 2.6GHz spectrum frequency up for auctioning, states that the winning licensee is required after the operational license award to roll out services at least as follows;

“Phase 1 between the second and third year, at least two state capitals in each of the six geo- political zones of the nation. In phase 2 between year four and year five, an additional two state capitals in each of the six geo-political zones and in phase 3 between year six and year seven, the remaining 13 state capitals in the six geo- political zones should be covered.

“Within six months from the award of license, the licensee shall convey to the commission the schedule of states that will be covered. In the event of the winning licensee’s inability to deploy services as specified herein, the commission reserves the right to sanction the licensee based on relevant sections of existing regulations except for areas where force majeure is established,” the commission said.

Industry watchers however say that these binding terms and conditions may further slow down broadband penetration in the country and may negatively affect the ultimate target of the National Broadband Plan (NBP) which is to get 30 percent penetration by 2018, as the unfavorable operating environment due to lack of forex might affect spectrum bidding participation.

Nwaulune revealed that the 2.6GHz spectrum to be auctioned next month was open to foreign operators who register with the Corporate Affairs Commission (CAC).

Jumoke Akiyode