•As N600bn Broadband income is slowed
Ben Uzor Jr
The Federal Government’s inability to effectively manage its national spectrum resources is causing the nation significant economic losses in terms of lost revenue generation and foreign direct investment opportunities, analysts have said. Proper allocation of spectrum bands, according to the analyst would enable telecommunications companies roll out innovative mobile broadband services. Analysts say the Federal Government has remained passive to the incidence of poor spectrum management, even in the light of the importance of broadband to economic development.
According to them, an increase in broadband penetration from 1 percent to 10 percent would invariably raise the country’s annual gross domestic product by 1.22 percent by 2015. “I will score them low here. Nigeria’s low internet penetration can be attributed to poor spectrum management. We are aware that broadband is a driver of all sectors, it makes all the sectors to be more productive. From education, energy, health etc. Spectrum is required for broadband services but these frequencies are not readily available. The 3.5GHz spectrum is very suitable for broadband but it’s under the control of the Nigerian Broadcast Corporation (NBC).
“Even spectrum within the purview of the Nigerian Communications Commission (NCC) is still not properly allocated. The cost of spectrum is still very high for local operators and that explains why foreign operators dominate the market. “There should be a deliberate policy to encourage local operators”, Lanre Ajayi, past president, Nigeria Internet Group, said in an interview. It was reported recently that the NCC may award four spectrum licences before the end of 2011. The report further disclosed that four telecoms companies will be licensed on the 2.5GHz spectrum by 2011, while two telecoms operators would be licensed on the 700MHz spectrum in two years.
Much is yet to be seen from the telecoms regulator. The GSMA, a global body representing the interest of mobile operators has also predicted that Nigeria’s wireless broadband market will have a direct revenue impact of N598 billion in the next three years. A source at the NCC, who asked not to be mentioned because he was not authorised to comment, said the NCC was working assiduously to develop a comprehensive policy that would ensure that spectrum resource is optimally utilised for the overall benefit of the nation. He however did not comment on when the commission would commence issuance of spectrum licenses. Over the last decade, investment in telecoms has exceeded $18 billion, out of which about $12 billion is from FDI, while the balance is from local investors.
There are suggestions that the government realised well over N300 million from the sale of spectrum. Industry analysts argued that the telecoms sector is missing out on such economic gains. The telecoms markets’ capacity to attract investment, according to the analysts would depend largely on a positive regulatory ambiance created by the government, as it relates to spectrum management and infrastructure development. Recently, Barack Obama, president of the United States of America (USA) ordered that an additional 500 MHz of radio spectrum be made available for licensing over the next 10 years. Obama said wireless broadband connectivity was important to America’s economic prosperity.
Analyst have urged Jonathan to take a queue from Obama, noting that there was need to meet the demand for spectrum as a result of the fast growth of data services on mobile networks.“The 2.3 GHz award process has been mired in controversy for over a year. More than two years have passed since 2.5 GHz was proposed to be offered by the NCC, and negotiations over its use are yet to be concluded. There is a lack of clarity over when the vital Digital Dividend spectrum will be passed to the NCC for use by operators, which could dramatically increase mobile broadband coverage”, Ross Bateson, spokesperson for GSMA said. He said the NCC should ensure that spectrum is made available quickly and with maximum transparency, using international harmonised band plans.
“Nigeria started by selling spectrum at very high prices. It will seem that the NCC had brought in better revenue for the government. “The telecoms consumer will pay for this at the end of the day. There are some people who believe that the 2.3GHz award process was not transparent. In most cases, spectrum falls into the wrong hands who are not really ready to roll out broadband services. Due to the fact that they are connected in government, they buy this spectrum to re-sell to make profit”, an analysts who pleaded anonymity said. Telecoms operators had earlier expressed concern that rural communities will be denied access to efficient and affordable broadband services due to federal governments’ inability to efficiently manage our national frequency spectrum resources. Adewale Jones, vice president, Association of Telecommunications Companies of Nigeria (ATCON), said: “I will not score them high.
I think the major challenge we have today is that quite a number of people involved in spectrum management do not understand the technicalities involved. Quite a number of people responsible for managing this national resource do not have the requisite knowledge to deal with the complexities inherent in spectrum allocation and re-farming. If you think about Nigeria’s desire to connect 50 million people to the internet by 2015, then there is need for effective spectrum management to make this happen. This is because wireless broadband requires spectrum.
“Effective spectrum management will facilitate the use of spectrum in the interest of the nation and also ensure that adequate spectrum is provided to all users, public and private, long and small, in both the short and long term. If demand exceeds availability; therefore, sharing it is not only necessary, efficient management is highly required”, Shola Taylor, chief executive officer, Kemilinks International said.
