All Eyes on NCC to Re-activate 2.6GHz Auction
Industry stakeholders are eagerly awaiting the auction of the 2.6GHz spectrum licence, which was suspended indefinitely recently by the NCC. Emma Okonji reports
For the second time in four months, the Nigerian Communications Commission (NCC), announced the suspension of the auction of the nation’s 2.6GHz spectrum licence. The first was in December 2014, after the auction date was fixed and expression of interests announced. The second suspension happened two weeks ago, after fixing the date and the Information Memorandum (IM) uploaded on the NCC’s website.
The indefinite suspension has left industry stakeholders in a confused state because they were hopeful that the plan to license the 2.6GHz spectrum would address the shortfall in the nation’s broadband initiative. They had commended NCC for the initiative only to be confronted by postponement, which they considered as inimical to broadband growth in the country.
Although the Executive Vice Chairman of NCC, Dr. Eugene Juwah had cited administrative reasons for the initial postponement, he, however, said the second postponement was till further notice.
Industry stakeholders are, however, hopeful that the 2.6GHz spectrum licence will further deepen broadband penetration and help government attain increased broadband penetration by 2018, as envisaged by government. They therefore called on NCC to put its house in order and ensure that it resumes the auction plan for the second time and endeavour to conclude the process without further hitches. About 2.6GHz Spectrum The 2.6 GHz band, sometimes also referred to as the 2.5 GHz band, is a global spectrum band that was allocated by the World Radiocommunication Conference (WRC) in 2000 for terrestrial mobile communications services. The band provides an opportunity to meet rapidly rising demand for capacity to deliver mobile broadband services on a widespread and common basis across the world. This possible outcome, which is a rare opportunity in the frequency domain, is beneficial to customers worldwide where ever it is deployed. It also supports national policy objectives to achieve the direct economic benefits of economies of scale such as maximum affordability and coverage of broadband services, as well as ease of roaming and interoperability of services on a global basis.
The 2.6 GHz band is unique because it includes a substantial amount of spectrum that has been allocated on a primary basis in all three International Telecoms Union (ITU) regions, which include Nigeria, for the purpose of terrestrial mobile communications. All other spectrum bands up to 3.5 GHz include significantly smaller amounts of spectrum for terrestrial mobile communication.
On a global scale, the 2.6GHz licences have been issued in several countries such as Norway, Sweden, Finland, Singapore, Hong Kong, and the United States. More 2.6 GHz auctions are anticipated over the next one to two years in multiple national markets, and the NCC is championing that of Nigeria. Benefits According to International Telecoms Union (ITU), an agency of the United Nations (UN) whose purpose is to coordinate telecommunication operations and services throughout the world, the 2.6GHz spectrum is a stimulating factor for the timely expansion of affordable broadband access in national markets by attracting a wide range of current and potential operators. It also well suited for the timely deployment of emerging popular broadband wireless technologies.
This goal is particularly important in developing markets like Nigeria where wireless-based broadband access is carrying more weight than in developed markets where fixed broadband access infrastructure is already widespread.
Director, Spectrum Administration at NCC, Austin Nwaulune, said the 2.6GHz spectrum has been influenced in Nigeria by the need to open up the space for the delivery of present and future generations of broadband services to subscribers in consonance with the Nigerian National Broadband Plan of 2013-2018. He noted that the spectrum band is key for both new entrants and incumbent operators.
“The Commission arrived at this after wide consultations with relevant industry stakeholders to determine the best way to issue the spectrum,” Nwaulune said.
According to him, NCC opted for the auction exercise for most of its spectrum sales because it is an efficient way to assign scarce spectrum resources and a better approach to manage competition.
He added that it would help deliver broadband everywhere and offers opportunity to improve network performance. The more frequency an operator has, the more capacity the operator will have to deploy and improve services, Nwaulune said, adding that the 2.6GHz spectrum has the capacity to harmonise spectrum bands that are used globally and allows connectivity anywhere in the world. Other benefits of 2.6GHz spectrum according to him, include reduction of complexities, reduction of interference across borders, which means it can be used anywhere in the world because it is a harmonised spectrum band with increased flexibility for roaming subscribers’ lines. Suspension In spite of its many benefits, the NCC is still battling to successfully auction the spectrum, leading to the suspension of the auction process twice.
Announcing the suspension for the second time, Juwah said: “The NCC, on behalf of the federal government regrets to inform parties interested in participating in the auction of frequency spectrum licences in the 2.6GHz band that it has decided to postpone the process of the auction until further notice. By this announcement, the 2.6GHz indicative auction timetable is suspended.” Industry Reacts Reacting to the suspension, President of the Association of Telecoms Companies of Nigeria (ATCON), Lanre Ajayi, has said the suspension of the auction of the 2.6GHz spectrum band is not good for the image of the telecoms industry, which the NCC has laboured hard to build over the years.
According to him, Nigeria initially had challenges of predictability and consistency, which he said, were the concern of both local and international investors. He, however, said the NCC had tried to overcome the challenges through its transparent manner of auctioning past spectrums,
He noted that the challenges may resurface if the issue of frequent suspension of the auction process for the 2.6GHz spectrum is not addressed.
Commending NCC for the well planned and executed auction of the GSM licence in 2001, where MTN and Econet Wireless (now Airtel Nigeria) paid as much as $285 million each for GSM spectrum, Ajayi said NCC won investors’ confidence through the process. According to him, that process was thorough, timely and well executed. He also cited the instance of the 2.3GHz spectrum that NCC auctioned in February 2014, where Bitflux paid $23 million to win the spectrum licence. Ajayi said these were credible auctions that were timely and won a lot of credibility for Nigeria. He advised the NCC to apply the same measures it used in past auctioning, for the 2.6GHz spectrum licence in order to maintain the credibility it has built and sustained over the years.
“The continuous suspension of the 2.6GHz spectrum licence auction will raise credibility issue for Nigeria and this must be avoided, in order to encourage investors in investing in the country’s broadband initiative,” Ajayi said.
However, the Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said although the suspension has become worrisome to industry stakeholders, “it is better for the NCC to get it right from the beginning, in order to maintain the credibility of the industry in the eyes of international and local observers.”
According to him, “the NCC had already told Nigerians that the issue was administrative and we believe it for its words but we also want the NCC to address whatever administrative issues may have erupted and ensure the licence is auctioned as planned.”
Frequency allocation and auction is a sensitive issue and must be treated with caution. The 2.6GHz spectrum is a global spectrum for mobile broadband deployment and many countries have auctioned it successfully in their various countries to drive broadband penetration. We should therefore allow NCC to get it right. In my view, enough time is actually needed to get the spectrum auction right, Adebayo said.
Going by industry reactions, the NCC needs to rise above all challenges and odds, and ensure that the 2.6GHz spectrum licence auction is completed as planned in order to maintain investors’ confidence in the country’s broadband plan.