News Column

2.3GHz: 'Broadband, next revolution after voice'

January 21, 2014


Broadband (fast speed Internet) may be the next revolution that  Nigerians are looking out for since the online retail market space and a host of other germane Internet-related issues are becoming a leveller.

This even as, the telecoms regulator, the Nigerian Communications Commission (NCC) is planing to auction fresh spectrum in the 2.3GHz frequency band that would make high-speed Internet services more accessible to Nigerians businesses, government and individual telecoms consumers.

Industry watchers note that the  telecoms sector was on the verge of another revolution that will speed up broadband Internet penetration in the country, saying: "A development that will be made possible by ongoing moves by the NCC to auction new spectrum to deliver high-speed Internet services to Nigerians."

Since the liberalisation of Nigeria's  telecommunications sector 12 years ago, growth has been by leaps and bounds, but only mobile segment is the most active and fastest  growing segment of the sector, with a subscriber base of 121.3 million and a penetration/teledensity of 86.62 per cent as at the end of the third quarter of 2013.

While in 2001, telecoms subscription  stood at around 400, 000 fixed lines and teledensity stood at 0.73 per cent, data (Internet services) on the other hand,  is  relatively stunted despite having grown significantly in the past years.

It will also be recalled that in  2004, Internet penetration, based on percentage of Internet users per population, was at only three percent but as at the end of 2011, it was estimated to be about 28 percent.

The percentage of internet users moved to 32.9 per cent in 2012 but industry experts say this may have increased to more than 36 per cent at the end of December, 2013, with more than 55 million people connected to the Internet compared to 121.3 million with active telephone subscriptions

Commenting on broadband penetration at a stakeholders event recently, Minister of Communication Technology, Mrs. Omobola Johnson, disclosed that despite  the steady growth in internet, broadband penetration is still quite low at six percent.

This is in spite of the over 10 terabytes of bandwidth capacity available in the country, made possible by the landing of international submarine/ fibre optic cables such as Glo 1, Main One and the West Africa Cable System, but which are still heavily lying in the sea shores.

Also speaking in the same vein,Chief Executive Officer, Main One, Ms Funke Opeke, hinted that  about five percent of the bandwidth capacity available on Main One undersea cable is currently being utilised, while 95 percent of the capacity is  redundant, but,which is still available for use.

Industry watchers observed that other cables are facing similar under-utilisation challenge as they are facing the problem of last-mile connectivity, especially without available spectrum to deploy the capacity to make broadband service  variables and accessible to Nigerians.

It was against this backdrop  of low broadband penetration that gingered the NCC  to want to license fresh spectrum that will be used in deploying broadband services, which will help businesses and individuals in the area of efficiency and productivity.

Throughout 2013, consultations on the best approach to license the remaining block of the 2.3 GHz spectrum in a way that will produce maximum economic value for government and the telecoms consumers, whose demand for broadband services have  refused to wane in recent years.

A spectrum auction is a process , a government deploys  to sell licences to transmit signals over specific bands of the electromagnetic spectrum and to assign scarce spectrum resources.

Depending on the specific auction format used, a spectrum auction can last from a single day to several months from the opening bid to the final winning bid.

Like every new move or change, some stakeholders have opposed NCC's plan of auction to determine the licensee of the spectrum and the Commission has reiterated that  an auction is a "fair, transparent and efficient process of assigning the spectrum."

Daily Sun gathered that  licensing of the remaining 30MHz of the 2.3GHz spectrum, soley lies  on demands by operators for additional spectrum to enable the provision of wireless broadband services ,which is in line with international standards.

Currently,the  internet users in Nigeria is growing steadily but the actual broadband  penetration is estimated by the Ministry of Communication Technology at  six percent and for this to grow five-fold by 2017, licensing of the 2.3GHz spectrum is necessary.

Already, the NCC had released the timetable on the auction process, which has begun in earnest, even as the licensee of spectrum is expected to merge by March 14, 2014.

NCC has placed a minimum offer price of $23 million (about N3.6 billion) on the spectrum band to be auctioned to a sole provider of wholesale broadband services this year.

According to the NCC-released Information Memorandum, IM,  the process for licensing of unpaired spectrum in the 2.3 GHz band by the commission, the auction is in furtherance of the objectives of the Federal Government, as set out in the Nigerian National ICT Policy 2012 and the National Broadband Plan 2013, towards driving broadband penetration.

As a necessary prelude to the licensing process, the Commission had conducted series of stakeholder consultations to determine the demand level for spectrum, the approach to licensing and the potential interest of the consumers amongst other objectives.

The Executive Vice Chairman of NCC, Dr. Eugene Juwah, said, "Based on the positive outcome of the consultations, and the direction of the National Broadband Plan, the Commission has decided to undertake an auction to award a spectrum licence to build and operate networks in this spectrum band  to provide Wholesale Wireless Access Services, WWASL, in Nigeria." Noting that, to qualify to bid in the auction process, the Commission says applicants will not have to be licensed network operators in Nigeria.

"However, the successful bidder will be granted a WWASL and specified fee to be paid before the licence will be issued. The tenure for the WWASL licence will be 10 years, subject to renewal.

It would be recalled that the formal licensing process started with the issuance of Public Notice No. 1/2013 on November 15, 2013 and continues with the release of the Information Memorandum, inviting parties to participate.

The release of the IM, NCC notes, will be flowed by a period for the submission of questions to the Commission relating directly to the licensing process defined in the IM.

"All additional information including the answers to questions raised during the process will be made available through the Commission's website and will form part of this IM. The identity of questioners will not be revealed," NCC says in IM.

The spectrum is considered to be a valuable national resource for which commercials opportunities exist. The reserve price for a 10 year licence, which is set at $23 million, is the minimum commercial value of the licence.

According to the timetable of the auction process, the opening bid will be determined by the Commission as a reserve price plus the bid increments for the first round.

The opening bid shall be the minimum acceptable bid for the licence in the opening round of the auction

On completion of the auction, the successful bidder will be deemed to have been awarded a provisional licence.

The successful bidder will, then, be required to pay the balance of the spectrum licence fee  to the Commission within 14 days from the date of the Award of the Provisional Licence on March 14, 2014.

NCC has chosen auction process as the transparent and fair way to allocate spectrum,since the telecoms deregulation,  and not through arbitrary allocation to allocate spectrum to a particular region instead of another.

In 2001, the Commission licensed three digital mobile operators through an auction process that is widely adjudged to have been highly successful and transparent. This was followed by the licensing of a second national carrier and the fourth digital mobile operator in 2002.

The Nigerian Communications Act was signed into law in 2003 to strengthen the regulatory framework as well as to enhance the independence of the regulator.

By 2004 ending, there were two national carriers, four digital mobile operators and 24 fixed telephony providers of which six were Fixed Wireless Access operators.

The NCC in 2006,introduced the Unified Access Service Licensees, UASL, regime, to enable operators to take advantage of convergence in services and technology  to offer better service.

While in 2007, the Commission awarded a further UASL and spectrum licence to Etisalat, bringing the number of parties with national mobile licensees to five. It also awarded licences to Visafone in the 800MHz band; Alheri Engineering Company Limited in the 2100MHz; Celtel Nigeria Limited (now Airtel Nigeria) in the 2100MHz band; Globacom Limited in the 2100MHz band and MTN Nigeria Communications Limited in the 2100MHz band.

The Commission issued International Submarine cable Infrastructure and Landing Stations Services licences to Main One Company Limited in 2008, and  MTN in 2010.

And  the Commission also  awarded the 2.3GHz spectrum to Spectranet Limited and Mobitel Nigeria Limited  in 2009.

Already,stakeholders in the industry,including the Association of Telecommunications Companies of Nigeria(ATCON), Association of Licensed telecoms Operators of Nigeria(ALTON), the Nigeria Internet Group(NiG) have tasked NCC to be guided by its independence  in the auction process in order not to disrupt the healthy competition in the sector.

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Source: Sun, The (Nigeria)

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