The Nigerian Communications Commission (NCC) is taking a no-holds-barred approach to the issuance of spectrum in a bid to further boost broadband penetration and has final granted MTN Nigeria the approval to utilize spectrum from the 800MHZ (Megahertz) frequency acquired from Visafone.
This increases the possibility of helping the regulator achieve its goal of 70 percent broadband penetration in five years.
In 2016, Visafone communications Limited with a Universal Access Service License (UASL), applied to the telecoms regulator for an approval to effect a change in its shareholding structure by transferring 100 percent of its shares to MTN Nigeria.
Having fulfilled the conditions stipulated in the “Approval-In-Principle”, the NCC, in line with its procedure granted a “Final-Approval” to Visafone for the change in its shareholding structure.
Visafone then applied for approval to transfer its license to MTN, so as to allow the use of its spectrum for the roll out of 4G LTE (4th generation long term evolution) service and in turn, boost broadband service penetration.
However, the NCC continuously hesitated after other operators kicked against the idea, citing market dominance as reason for the opposition.
“When MTN acquired Visafone, the regulator put restrictions on the use of its spectrum license for 4GLTE service which was one of the main reasons why we bought the company. This asset is key to the roll out of this service, however, we were only allowed to use the spectrum to provide 4G services to Visafone’s initial subscribers who migrated to our network. Finally, with the license transfer approval, we can use the 800MhZ spectrum to provide high speed internet to all our subscribers,” a source at MTN Nigeria told BusinessDay.
Telecommunications analysts say that the final approval of the spectrum license is a move in the right direction, as the back and forth since 2016 has in many ways hindered the speed of broadband penetration and the deployment of high speed Long Term Evolution (LTE) service in Nigeria.
LTE is a type of 4G that delivers the fastest connection for a mobile internet experience – up to 10 times faster than 3G and is not the same as just 4G.
“800MhZ is key in rolling out broadband and data services in the rural areas and there is great focus now to increase the broadband penetration rate which currently sits at 33 percent to 70 percent by 2024. The only way we can do this, is if we are able to have sufficient spectrum. The amount of bandwidth spectrum that MTN currently holds should be sufficient to deploy very high speed mobile broadband internet and prepare MTN for the soon to be released 5G spectrum that will be available by 2020,” Olusola Teniola, president of Association of Telecommunications Companies of Nigeria (ATCON) told BusinessDay.
The NCC admitted that the matter is of significant interest to relevant stakeholders in the telecoms industry, and therefore held a public inquiry to elicit comments from the general public, especially telecommunications operators.
Umar Garba Danbatta, executive vice chairman (EVC) of the NCC said that “the commission had to embark on re-planning of some of its Frequency bands in order to reap the benefits of effective utilization of spectrum as well as improve operational efficiency and regulatory excellence.”
Danbatta said that the commission re-planned the use of 800MHz band to accommodate technology development in the telecom industry in 2013, and new spectrum assignments were conveyed to the operators according to their spectrum holdings in the 800MHz band.
“Subsequent to the re-planning of the band, Visafone, one of the operators, who had earlier been assigned 10MHz in the 800MHz band applied to the commission for transfer of its license and spectrum to MTN,” he said.
Airtel in its submission at the 2018 public enquiry stated that “this arrangement will not only increase MTN’s market power, but will substantially lessen competition in the mobile voice and data market segments of the industry, which could lead to MTN becoming a monopoly.”
9mobile submitted that MTN currently holds 38 percent of the total spectrum assigned in the telecommunications industry while the other ten active operators jostle for the remaining 62 percent. It stated that “the cost of rolling out LTE services on 800MHz is 25 percent more cost effective compared to 2.6GHz spectrum.”
MTN however said that the concerns raised by the different operators are merely assumptions that have not been substantiated based on the fact that “MTN cannot be said to have engaged or be engaging in any acts under the Nigerian Communication Act 2003 or Competition
Practice Regulations 2007 that constitute or may result in substantial lessening of completion.”
In explaining this point, MTN noted that access to spectrum is “not prohibited under the Act or any of its subsidiary legislations. It further stated that other operators such as Smile Communications Limited and Intercellular Limited currently operate on different parts of the 800MHz spectrum and MTN is merely exploring the opportunity available to it to get access to this spectrum.”
BusinessDay gathers that MTN has been unable to re-farm its 1.8GHz spectrum considering that it might pose a negative impact of its 2G services. Although MTN has 38 percent of the entire spectrum holding in the country, the company says that the 2.6GHz spectrum which it acquired after winning the bid by NCC, constitutes the largest percentage.
“As such, MTN has been unable to deploy LTE services using the 2.6GHz spectrum,” the company said.
This additional broadband spectrum positions Nigeria to join countries like USA, Austria, Germany, Japan, Norway, Finland, Denmark and a host of others who have commercially launched LTE networks for digital development.
Jumoke Akiyode-Lawanson
