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SPECIAL REPORT: Why NCC Must Create Spectrum Market – Experts

Isaiah Onwuanumba
Experts in Nigeria’s Information and Communications Technology (ICT) industry have said Government must create a spectrum market to ensure full utilisation existing frequency bands that were auctioned over the years.
They believed this has become necessary following Government’s proposed auction of 2.6GHz Spectrum. There are 2 x 70 MHz Slot in the 2.6GHz Band up for sale and are being put up for the most qualified organizations to utilize them for the benefit of the mobile users.
IT NEWS NIGERIA gathered that since the past decade the sector’s apex regulator, Nigerian Communications Commission (NCC) had issued universal licences but large chunk of such frequency bands are not used.
Operators would acquire universal or nationwide licences but they chose to concentrate only in major cities leaving other parts of the country without services. They would not allow other operators or new entrants to deploy services within that frequency band because it is not allowed in the present regulations guiding frequency acquisition and utilization. GSM operators hold universal licences yet a number of them concentrated in major cities for years while at the same time the scarce resource remains unutilised in most parts of the country.
The argument is that spectrum market would change all that and would ensure that operators that could not deploy services in other parts other country could resell to anyone willing to render such service in those places and in the this process the nation would experience full use of spectrum bands most considered a scarce resource.
According to former President, Association of Telecoms Companies of Nigeria (ATCON), Engr Lanre Ajayi said last year that there is need for regulator to create spectrum market, a frequency exchange market that will enable both existing and would be operators to invest in spectrum based on their business case without inference from government watchdog. Ajayi reasoned that the move represents a sure a sure way to entrench realisation of more spectrum for the benefit of middle and last mile users.

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According to him, frequency band is an investment and an owner may change his mind to sell to someone based on current reality but this is not possible in Nigeria’s telecoms market today. ‘‘People are asking for that to change. Spectrum market will allow operators to pass a spectrum to another operator willing to use it in that place.”
Speaking further, Ajayi said until now the regulator did not provided such business environment and this has continued to impact on the sector.
”Now NCC has constrained operators not to do that. Spectrum market should be created. This is happening in other countries of the world. Those operators have universal licences, that is licences on national bases but cannot transfer it especially in places original frequency owner cannot deploy services. Such frequencies have remained unused for years. At this instance, it is not useful to the owner and it is not open to potential and other existing service providers,’’ he noted.

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Nigeria Internet Group (NIG) noted that NCC needs to do more than just create spectrum market. The body is of the opinion that regional frequency licences as against universal licences will ensure proper and full capacity utilisation of available spectrum resources.
The group’s former president, Engr Bayo Banjo said the nation’s past experiences in spectrum allocation saw big operators tie down frequencies without putting them into use especially in areas outside the big cities.
Banjo noted that the 2.3GHz spectrum had been in the custody of some people over the last five or six years without its impact being felt in the country.
He said national frequency allocation has the disadvantage that when they are not used nationally in line with the status of the licence, retrieval becomes difficult, if not impossible, because the owners will run to court to frustrate any such attempt by the regulator.
“The lesson we gathered from the past spectrum auctions is that we should never, ever allocate frequencies on a national basis. This is a most important issue. “If you look at the.2.3GHZ, some of them have not even left Lagos; some have done just Lagos and Abuja, some Port Harcourt or whatever. When do you think we are going to see them operate in Sokoto or Zamfara or other far flung places?” he said.

According to him, if the NCC insists on issuing national spectrum licences, it should therefore split the licences into 36 representing the states of the federation or into 72 so that whoever is issued the licences will append his signature on each of the licences so that in the event of a failure to deploy services in any of the states/regions, it will be easy for the NCC to retrieve that particular licence. He said this way, it becomes much easier for the judges to decide on the case should the licencee decides to go to court.

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He said: “What I am saying is that when you want to issue a national licence, issue 36 or 72 licences so that when someone doesn’t roll out in a particular state, it is easier legally to retrieve that frequency.

“If frequencies are allocated as national licences under one licence, there is a legal difficulty in trying to retrieve that frequency. South Korea for instance has the highest density of internet penetration and the country is just using the 2.3 GHz. So when I look at it: all the excuses we need spectrum, we need this; we need that. Let us be logical on this issue: Do not allocate frequency on a national level, if you want to give a national licence, break it down into 36 or 72 different zones.”

Our Correspondent gathered that International Telecommunication Union (ITU) had identified the 2.6GHz band as a global allocation for mobile telecoms. The 2.6GHz radio spectrum band is a ‘capacity band’ for mobile broadband, well-suited for the next generation of mobile technologies that respond to the soaring demand for data-heavy content, such as video.
The band is identified for mobile in all regions and has the potential to be used in a harmonised manner on a global basis. The harmonised use will result in economies of scale for industry and cheaper handsets for consumers, as well as increased flexibility for roaming.
The ITU has proposed several possible band plans with a number of options including 2x70MHz for feature driven development (FDD) with a 50MHz test driven development (TDD) in the centre gap; FDD only; and Flexible TDD/FDD arrangement
Excessive per-MHz spectrum costs are an issue in certain markets, as a result of governments seeking to ration spectrum in order to maximise short-term revenue from the auctions
The 2x70MHz is a technology-neutral option, supporting both TDD and FDD technologies like long term evolution (LTE) and Wi-MAX.
The spectrum available in the 2.6GHz band provides for large carriers such as 2x20MHz, which is ideal for the deployment of LTE.
ITU however warns that Governments should not look to generate excessive fees from the licensing of 2.6GHz spectrum, as this will artificially limit demand, negatively impact network deployment, increase consumer prices and limit the potential economic benefits. Excessive fees also can impede policy goals of delivering mobile broadband access to everyone.
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 loike Nigeria, mobile networks are being used to provide broadband services to the many communities beyond the reach of the limited fixed-line infrastructure. According to global systems for mobile –telecommunications association (GSMA), 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 more spectrum available.
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.
The allocation of the 190MHz available in the 2.6GHz band would make a substantial contribution towards meeting market demand for mobile broadband services. It is likely that
new spectrum bands will be discussed at the ITU in the 2012-2015 timeframe, and only be available some time after the end of this period. The 2.6GHz band will be a vital tool to help bridge capacity needs during this time.

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