Stakeholders Raise Concern Over Cost of 2.6 Spectrum

​Following the agonising move to dispose of the 2.6 GHz Spectrum by the Nigerian Communications Commission (NCC), the nation’s telecommunication regulatory agency, stakeholders gathered once again to harp on the need to lighten the financial burden attached to the spectrum to be able to enable operators buy and utilise the resource.

Giving this clear indication at a Stakeholders Forum organised by the Commission in Lagos, some of the stakeholders proffered solutions that will ensure that the financial burden on licensees are reduced so that the aim of broadband penetration can be achieved.

According to the External Affairs Manager, NATCOM, operators of ntel , Osondu Nwokolo, there is a need for the Commission to address issues pertaining to Rollout Obligations and adopting a Revenue Sharing method that will ease the cost of acquiring the Spectrum.

 He explained that placing the Rollout Obligations on the licensees will enable the Regulator firmly implement penalties where operators fail to meet requirements laid out by the Commission.

He further enthused that if the Commission adopts the Revenue Sharing mechanism, it can drastically reduce or abolish the payment of exorbitant acquisition fee paid by licensees, and further attract more bids. 

The Commission offered 14 Lots of 2 X 5 MHz FDD paired Spectrum in the 2.6 GHz band ranging from 2500 – 2570MHz and 2620 to 2690MHz (totalling 2 X 70 MHz) for auction.  

When the intention to bid was published in February 2016, the NCC put the unit Lot price at Sixteen Million United States Dollars only (US$16,000,000.00) for each of the 2 X 5 MHz .

It would be recalled that in May 21, 2016, NCC announced the qualification of mobile telecommunications operator, MTN Nigeria as the sole winner of Six (6) Lots out of the Fourteen (14) Lots on offer and paid the bid deposit as specified by the Information Memorandum on the Auction. Many other operators stayed off the bid process due to the cost implication.

In 2014, NCC had announced the proposed auction for the 2.6GHz which was to take place in December 2014. However, a month before the auction date, the auction was postponed.

Also, in March 2015, NCC postponed the auctioning of this same spectrum for the second time until the announcement in February 2015.

With eight (8) Lots still up for sale, the Commission has organised the Forum to feel the pulse of stakeholders on the path to toe in the auctioning of the Spectrum.

While speaking on the need for the NCC to bring down the Spectrum acquisition cost and further help in extending funding from the Universal Service Provision Fund (USPF), Director, Regulatory & CSR, Etisalat Nigeria, Ikenna Ikeme, noted that it is a challenge trying to attracting investment into the country, and the telecom sector is not insulated from this. Attracting local funding is also difficult as banks are not disposed to granting such huge funding to telecom infrastructure development.

Also Manager, Radio Planning and Optimisation, Airtel Nigeria, Lateef Akintunde said cost is a big factor in deciding the auction and that the Reserve Price should be lowered as licensees are also expected to make further investments after acquiring the Spectrum license.

Making recommendations, Osondu Nwokolo further asked the NCC to look into amending the rules on Spectrum farming or trading and spectrum sharing to enable operators maximally utilise the Spectrum.

Director, Spectrum Administration and Management, NCC, Austin Nwaulunne explained that the Stakeholders’ Forum organised by the NCC is to get the pulse of the industry and know the direction to take. According to him, the 2.6 GHz Spectrum is a natural resource that was benchmarked and priced based on the peculiarities of the country. “We did benchmark and priced it based on peculiarities, and Nigeria was below the average in pricing.”

He announced that the Commission has slated a date for stakeholders’ discussions on the possibilities and requirements for Spectrum sharing.

Leave a Reply

Top
%d bloggers like this: