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Link Between Spectrum Auctions and Broadband Development [New Vision (Uganda)](New Vision (Uganda) Via Acquire Media NewsEdge) With the release by the Nigerian Communications Commission (NCC) of the auction modalities for the spectrum slots in the 2.6GHz frequency band, analysts opined that the successful auctioning of the spectrum will add the needed impetus to the country's march towards achieving pervasive broadband -penetration in Nigeria. ADEYEMI ADEPETUN writes. DATA traffic on mobile broadband networks is growing exponentially as both consumers and business users turn to smartphones, connected laptops, tablet computers and other devices to access the Internet, email, business applications and social networking services. In developing countries, including Nigeria, mobile networks are being used to provide broadband services tothe many communities beyond the reach of the limited fixed-line infrastructure. Reports believe that mobile networks have the potential to make universal access to broadband services an achievable goal. But mass-market usage of mobile broadband, particularly in densely-populated or visited areas, will only be possible if mobile networks have sufficient capacity and that depends on governments making spectrum available. According to the GSM Association, it is particularly important that governments allocate 190MHz in the 2.6GHz frequency band for mobile broadband services. As well as offering a major increase in capacity, the 2.6GHz band has the potential to be used for mobile broadband services worldwide, providing equipment makers with global economies of scale, enabling them to lower the cost of devices and network infrastructure. As such, the need to expand Nigeria's broadband drive and meet the five-fold increase 2018 target set by the Federal Government may have prompted the frequent auctions of spectrum by the Nigerian Communications Commission (NCC). Though, the Minister of Communications Technology, Dr. Omobola Johnson, had shortly before the 2.3GHz spectrum auction in February told The Guardian in an interview that more spectra will be issued before the end of the year. Johnson, who chairs the Frequency Management Commission, had said that more auctions will come in the 2.5; 2.6 and 700 GHz bandwidth before the end of 2015. The 2.3GHz saw BitFlux Communications emerged as the sole winner of the wholesale Wireless broadband license at the expense of Nigeria's telecoms giant, Globacom. Already, the NCC is also on the verge of licensing Infrastructure Companies (InfraCos) for the six geo-political zones of the country and Lagos. Indeed, hopefully before the end of the year or early 2015, the commission is also looking at licensing another operator in the 2.6GHz frequency band. NCC has also announced plan to auction the available spectrum in the 5.4GHz frequency band, all in an effort to drive broadband development as next revolution in the nation's telecoms sector. The industry is upbeat with the publication, on October 10, of the Information Memorandum (IM) on the proposed licensing of the 2.6GHz spectrum by the NCC. The IM defines the process that the commission has decided to adopt for the licensing of 2 X 70 MHz paired spectrum available in the 2.6GHz band. It also provides information on the Nigerian telecommunications market, details of the spectrum to be made available, the pre-qualification process, the auction process and indicative timetable. According to the NCC, the process for the licensing of the new spectrum is predicated on demands by operators for additional spectrum to avail them the opportunity of providing advanced wireless broadband services for the country. This is in line with international trends and provisions of the National Broadband Plan 2013-2014, which proposes a 30 per cent broadband penetration target for Nigeria by 2018. The target to achieve 30 per cent broadband penetration by 2018 is a tall order for us at NCC and we are doing everything possible to ensure that we make available new spectrum bands to ensure that wireless broadband services are provided to Nigerians, said the Executive Vice Chairman of NCC, Dr. Eugene Juwah, at a forum in Lagos last month. Nigeria currently has a broadband penetration of over six per cent and this with a clear plan to grow it five-folds in the next four years. Importance, specifications and price THE GSMA noted that the allocation of the 2.6GHz band for mobile services is vital to ensure sufficient spectrum is available to meet growing demand for mobile broadband around the world, particularly in heavily-populated areas, such as Nigeria. It stressed that the 2.6GHz band needed to be structured in line with international norms. Indeed, in the IM for 2.6GHz spectrum licensing, the spectrum offers 14 lots of 2 X 5 megahertz FDD paired spectrum in the 2.6 gigahertz, ranging from 2500 - 2570 megahertz and 2620 to 2690 megahertz (totaling 2 X 70 megahertz) for auction. A generic reserve price (GRP) of $16 million has, therefore, been fixed on each of the 14 lots. NCC further stated in the IM: 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 as such, each has a value of $16 million. This means each lot of 2 X 5 megahertz represents 1 eligibility point. An applicant that pays the IBD for six lots will have a total of 6 eligibility points. Consequently, with $16 million minimum GRP tagged on each of the 14 lots, it is estimated that the NCC will generate minimum of $224 million (about N35.8 billion) into the government coffer, in addition to the over N300 billion it said it had generated from spectrum licensing in the last 13 years of telecoms liberalisation. Qualification criteria On the eligibility criteria to participate in the auction, the NCC sated in the IM that applicants in the spectrum allocation process would not be required as a pre-qualification criterion to hold any telecommunications operational license in Nigeria. However, to be qualified, the regulator said that applicants must fulfil a number of pre-qualification criteria, which require applicants to be a company registered in Nigeria with the Corporate Affairs Commission (CAC) and also be an independent from all other applicants under the allocation process. Applicants must also transfer an Intention-to-Bid Deposit (IBD) into the designated account in cleared funds by the Commission. NCC said the deposit will bind the applicant to take up a licence, should it be a successful bidder, at the reserve price or any higher bid value submitted during the process. As part of the qualification criteria also, the NCC said that operators participating in the process must fulfil all existing obligations to the commission including payments of Annual Operating Levy (AOL), Spectrum and National Numbering Plan fees prior to prequalification, among others. On the assignment process, the commission said this will comprise an auction billed to take place during the first week of December, 2014 in Abuja through the application of Ascending Clock Auction system. Assessing impact of auction With the continued push by the GSMA that countries should licence the 2.6GHz band using a clear spectrum structure to stimulate more and better mobile broadband services. This would allow next generation technologies to work smoothly, thereby ensuring the maximum economies of scale and multiplying the variety of devices for consumers. To add up, industry experts, just as those licensed before it, the auctioning of spectrum in the 2.6GHz band, will add the required impetus in the provision of wireless broadband services nationwide. Though divergent views have previously been expressed by stakeholders on whether the spectrum should be auctioned as a national or a regional licence among multiple operators, the commission, has prima facie indicated preference for a national licence for the spectrum in order to ensure that a company with necessary expertise and financial muscle wins the auction to provide services nationwide. It has also been expressed that at a time when broadband development has been declared by the International Telecommunications Union (ITU) as a necessary tool to be competitive in the 21st century, the successful auctioning of 2.6 gigahertz spectrum will, no doubt, help in fast-tracking the delivery of fast-speed internet provisioning in the country. Nigeria is a country with most of the telecoms services being provided through wireless means, said President of Association of Telecommunications Companies of Nigeria (ATCON), Lanre Ajayi. Providing services wireless means you need to additional spectrum that should be available to the operators so as to be able to deploy services nationwide. A telecoms lawyer, Adewale Jones, also said with solid broadband plan in place in Nigeria, the ongoing collaborations between the NCC and telecoms operators to see how more spectrum bands can be made available are a step in the right direction. In his views, Chief Executive Officer, Swift Networks, Charles Anudu, noted that the having more spectra available will translate into the provision of more innovation by the operators to the consumers, whose demand for data, he observed, has been upswing. Benefits to broadband penetration According to him, Global mobile data traffic grew 81 per cent in 2013. Also, video traffic account for 53 per cent of the global Internet traffic. This is growing even faster in Nigeria, which is still an emerging market and fastest-growing telecoms market in the world. Indeed, telecoms firms are really trying in Nigeria but the growth in demand for data services, most especially, is outstripping the networks, putting more pressure on the operators. He explained further that the increase in the number of web-based applications, being developed daily, is another factor where demand for data is coming in the telecoms sector. So, for me, the licensing of the 2.6GHz spectrum band based on the timelines already stipulated by the Commission would produce multiplier effect COPYRIGHT (c) 2014 NEWVISION. ALL RIGHTS RESERVED. Provided by SyndiGate Media Inc. (Syndigate.info). |