Stakeholders in the telecommunications industry in Nigeria met yesterday, blaming amongst other factors, recession, for poor broadband penetration in Nigeria.
The Nigerian Communications Commission (NCC) in line with the objectives of the National Broadband Plan aims to increase broadband penetration across the country to 30% by 2018.
To this effect, the NCC had advertised, and recently conducted an auction for 14 lots available in the 2.6GHz spectrum band for operators. One lot of the frequency, it said, is made up of two portions of 5MHz. The NCC set a reserve price of $16milion for a lot. But only MTN was able to express interest in the process. The telco paid a total of $96million (N19.2billion) for the licence; a cumulative of 30MHz in the 2.6GHz frequency.
Disturbed by the development, NCC Chief Executive Officer (CEO), Prof Umar Dambatta convened stakeholders in the telecoms industry for the 2.6Ghz auction post-mortem, with the view to look at the grey areas noticed at the auction, and proffer solutions on the way forward.
The event, which held at the Sheraton Hotel, Lagos, was well attended by big time industry players, consumers, media executives, as well as the management team of the NCC.
Speaking at the event, NCC Director of Spectrum Administration, Austin Nwaulune lamented that the response to the auction process of the legacy spectrum “fell below expectation,” necessitating the forum. Urging the operators to speak out on the way forward, deliberations ensued.
David Venn, Spectranet CEO, said the process was skewed in favour of telecom firms that had ‘deep pockets’, arguing that the ‘beauty contest’ model appeared to be less transparent.
He said, while the success of the Global System for Mobile (GSM) communication revolution was driven by the influx of foreign direct investment (FDI), much more funding was needed to push broadband revolution.
He said the cost of the spectrum was on the high side, lamenting that the cost of deployment was another challenge, especially now that the investment climate has become so unpredictable. He urged the regulator to explore revenue sharing formula.
The Director of External Affairs at ntel, Osondu Nwokoro, said the foreign currency element of the bid price was a big challenge. According to him, some years ago, the Naira exchanged for N250 to a dollar. He said it currently exchanges for N500. He urged the Commission to look into how it can provide a ‘hedge’ as it has become difficult to get Forex. He agreed no less with Venn that high spectrum cost constraints roll-out.
While calling for the re-examination of the spectrum management policy, Osondu urged the NCC to also take a second look at the secondary spectrum market, and amend the colocation rule to allow active infrastructure sharing.
Etisalat’s Regulatory and CSR Head, Ikenna Ikeme, said that the telecom sector was not insulated from the ongoing economic recession, emphasizing that attracting local funding has been a Herculean task as the banking industry has also been feeling the heat of the recession. He urged the regulator to explore the use of the Universal Service Provision Fund (USPF) to assist the operator in this regard.
The NCC CEO, represented by NCC Director of Public Affairs, Tony Ojobo, restated the commitment of the Commission to ensure the achievement of the 30% target of the National Broadband Plan.
He said, “Broadband penetration in the country has improved to over 20%,” adding that the Commission will continue to catalyse growth in the industry through consistent and predictable regulatory interventions.