The board of the Nigerian Communications Commission (NCC) has approved a new flexible regulation for trading spectrum and transfer of license rights and obligation between operators in order to increase broadband infrastructure roll-out and deepen penetration levels.
Speaking at an interactive session with members of the media in Lagos yesterday May 16, 2018, Umar Garba Danbatta, executive vice chairman (EVC) of NCC said that the agreement was reached and the new regulation was approved on Thursday April 12, 2018.
Telecoms operators and stakeholders have applauded this fete as they have in the past few years clamored for a spectrum management policy which would allow sharing, transfer and trading opportunities between operators in order to further deepen broadband penetration in the country and to reduce hoarding of spectrum license by winning bidders.
Stakeholders are of the view that the cost of a spectrum license is too huge for smaller players, who would only be able to benefit if there is an opportunity for spectrum to be shared or transferred in portions.
“The cost of the license was actually a big factor, especially looking at the current exchange rate. That is why we continue to say spectrum management policy is what we should be looking at right now so that the cost can be shared,” Lateef Akintunde, Director at Airtel Nigeria, said while speaking at the NCC stakeholder’s forum on the licensing of the 2.6GHz spectrum auction post mortem in Lagos.
Another issue arose after winning bidders of particular spectrum licences including the 2.3GHz spectrum were unable to roll out broadband services, even after one year of issuance, as a result of strict foreign exchange policies and lack of infrastructure. They were therefore stuck with the spectrum license with no hope of trading or transferring.
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 operating environments have changed from the time of winning several years ago and the company did not foresee the recent foreign exchange devaluation.
With these, the NCC took into consideration, the importance of broadband and resolved in allowing operators to trade and transfer licenses in order to facilitate the roll out of broadband infrastructure and deepen penetration.
Austine Nwaulune, Director, Spectrum Administration, NCC, said a while ago that the commission would make sure that the 1 year deadline for service roll out is strictly adhered to as “this industry is so much in need of broadband service that we cannot afford any delays.”
Lanre Ajayi, at the time he was President of Association of Telecommunications Companies of Nigeria (ATCON), said he was of the opinion that the Nigerian market is big enough to have a secondary spectrum market.
“There are a large number of idle spectrums in the custody of some operators while numerous investors are yearning for spectrum to roll out services. It makes sense to allow such owners to sell to new buyers who may have need for the spectrum.
“However, participation at secondary market should be limited to those who obtained spectrum through competitive bidding, like auction to avoid a scenario where people use their contact to obtain spectrum from the government and sell in the secondary market,” Ajayi said.
Meanwhile Iconnect, a subsidiary of HIS has surrendered the Infraco license it recently won for the provision of broadband services to the North Central Zone.
This was disclosed by Danbatta, yesterday.
“Very soon we will advertise for new firms to take up the North Central Infraco license,” he said.
The EVC in his address to the media also mentioned that Nigeria’s mobile money penetration will grow only on the back of telcos.
“Kenya has about 60 percent mobile money service penetration, while Ghana has about 40 percent service penetration. Even with a lot more population numbers, Nigeria remains at 1 percent because unfortunately, the Nigerian model is bank led.
However, there are challenges on the telecommunications infrastructure in Nigeria, including security, because the networks must be secure and incorporate measures that will ensure security of financial transactions in Nigeria. The networks in this country are not secure enough to provide that kind of service, so discussions are going on about how we can appoint telecommunication companies as super agents or through the introduction of special purpose benefits, which is also telco dependent, in order to improve on the level of penetration,” Danbatta said.
Jumoke Akiyode-Lawanson
