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Published On: Tue, Oct 28th, 2014

Telecoms: Another tranche of licenses up for grabs

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Minister of Communications Technology, Mrs Omobola JohnsonBy Etuka Sunday

The Nigerian Communications Commission (NCC), is offering 14 slots of 2 X 5 MHz FDD paired Spectrum band ranging from 2500 – 2570MHz and 2620 to 2690MHz (totalling 2 X 70 MHz) for auction. An Information Memorandum (IM) to guide the proposed auctioning of the 2.6GHz spectrum has been released by the commission and can be accessed on its website.

The memorandum defines the process for the licensing of paired spectrum in the 2.6 GHz band by the NCC. A generic reserve price (GRP) of $16 million has been tagged on each of the 14 slots. This new licensing regime is to meet the demands by operators for additional frequency to enable the provision of advanced wireless broadband services in line with international trends. As a prelude to the licensing process, NCC said it conducted stakeholder consultations to determine the demand level for the spectrum, the approach to licensing and the potential interest of the consumers amongst other objectives.

According to the NCC, however, the process is also in furtherance of the objectives of the Federal Government as set out in the Nigerian National ICT Policy 2012, and the Nigerian National Broadband Plan 2013.

According to the IM, based on the positive outcome of consultations, and the direction of the National Broadband Plan, the commission has decided to undertake an auction to award spectrum licenses for building and operating networks in this spectrum band to provide Advanced Broadband Wireless Services to subscribers in Nigeria. Executive Vice Chairman of NCC, Dr. Eugene Juwah, said the auctioning could be completed before the end of this year or early in 2015 to give Nigeria’s broadband drive a new lease. This will meet the ambitions expressed by the Minister for Communications Technology, Mrs. Omobola Johnson, to grow broadband penetration by five-folds to reach 30 percent by the end of 2018, from the current 6.2 percent. The information memorandum states that the GRP is “the minimum price at which a lot shall be sold, which is the Reserve Price for one Lot of 2 X 5 megahertz and has a value of $16 million. Each lot of 2 X 5 megahertz represents one eligibility point. An applicant that pays the IBD for six lots will have a total of six Eligibility Points.” At $16 million dollars per slot therefore, the 14 slots will pool $224 million in revenues.

According to NCC, interested applicants do not have to be network operators in Nigeria in order to qualify to bid in the auction. It would be recalled Bitflux Communications had outdone Glbacom, Nigeria’s second national carrier to win the 2.3GHz wholesale wireless broadband license auctioned in February, 2014 through a selection process generally acclaimed by stakeholders as free and fair. The memorandum also states that “Each winner who does not currently hold a Unified Access Service License (UASL), which is the operational licence, will be issued one at an additional fee of N374.6 million.”

“The Reserve Price (R) for an applicant will be calculated as the GR multiplied by the number of lots (N) applied for by the applicant. For Example, Reserve Price for an Applicant that applied for 6 Lots i.e. 6 Eligibility Points is: $16 million X 6 = $96 million.” On completion of the auction process, the NCC will issue each winner a 10-year National Spectrum Licence on a state-by-state basis including for the Federal Capital Territory.

According to the NCC, the spectrum is offered by the commission on a technology-neutral basis, adding that for roll-out of services, the commission intends to follow the International Telecommunications Union (ITU), recommendation setting aside spectrum in the 2.6GHz band for the provision of advanced wireless broadband services. It can also be recalled that at the Nigeria ICT Centenary Award and Conference recently held in Abuja, the NCC boss had declared that the commission is currently addressing the challenges militating against the widespread deployment of broadband infrastructure and consequent increase in broadband penetration across the country. This, he noted, is because increased broadband penetration has a catalytic impact on any nation’s economy. He stated that a 10 percent increase in broadband penetration leads to a 1.3 percent increase in GDP.

According to him, the increased connectivity provided by the telecommunications industry is facilitating the drive for financial inclusion for the unbanked through mobile money, mobile payment and mobile banking solutions in the country.

Nigeria’s ICT sector has been growing both in net worth and size and has continued to be a major contributor to the nation’s GDP. The International Telecommunications Union has rated Nigeria as the fastest growing telecoms market in the world in the last five years.

Earlier in the year, NCC had invited competent companies to submit tenders for consideration in the Phase 1 process to license Infrastructure Companies (InfraCos) for deployment of metropolitan fibre optic infrastructure and associated equipment in Lagos and Abuja on an open access, non discriminatory, price regulated model. In a public notice, NCC said it has examined and considered the open access model as the preferred strategic means for the deployment of fibre optic backbone infrastructure that will bridge the current broadband gaps, enhance development of local content and deliver cost effective services to households and businesses in Nigeria.

The bottom line is that this accelerated drive to set up a strong infrastructure base and to invite more participants into Nigeria’s ICT sector is the major catalyst needed to launch our economy into a full scale dotcom era, from the present partial status.

 

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