It is the era of digital economy and the livewire of the ecosystem are bandwidth hungry. In this report, Olubayo Abiodun reflects on the efforts of NCC at revving up the momentum of Nigeria’s economy rejuvenation via broadband penetration with multiple frequency spectrum auctions.
IN quick succession, the Nigerian Communications Commission has had to call out the stakeholders for meetings since the end of Q2 2016. Each time the call was made the discussions have always been on the modalities for the rollout of new spectra in order to deepen broadband penetration in Nigeria.
The action of NCC leadership might not be unwittingly connected to the plan by the Nigerian government to diversify its economy from the mono-economy base which is derived from the oil and gas revenue. Conscious of the dwindling fortunes in the oil and gas industry, the Nigerian government has painstakingly decided to diversify its economy. And ICTs integration has been identified as one of the veritable tools for re-energising the economy which is at one of its lowest ebbs in recent time.
This is because digital economy is the DNA of the new world where the pervasive knowledge-economy is the driving force. Australia, Indonesia, USA, United Kingdom, Brazil, China, Malaysia, India and Singapore have already developed robust plans in this regard and they are using broadband to push the frontiers of their economy to greatness.
Nigeria too has set very ambitious target of becoming the 20th largest economy by 2020. But can Nigeria still achieve this ambition by 2020 in spite of the perilous status of the economy today? Principal partner, KPMG Nigeria, Joseph Tegbe is still optimistic that this is realisable. But this is on the condition that Nigeria’s knowledge economy is leap frog through broadband. This is the hook on which the Executive Vice Chairman, NCC, Umar Danbatta has anchored his vision for the industry. Danbatta is leaning on the economic impact of broadband which also showed positive trajectories from the studies of the World Bank that indicated that 10 per cent points increase penetration leads to a 1.38 per cent in GDP.
Though this percentage increase might look quite small, but when juxtaposed with Nigeria’s GDP $263 billion, the impact of 1.3 per cent on this figure will lead to a growth of $3.4 billion. And this is where NCC is very key in activating a new era of economic prosperity for Nigeria because the telecom regulator is responsible for allocating spectrum in the telecoms ecosystem. Through its functionality, experts say that spectrum is one of the crucial drivers of the broadband revolution. Pundits say that spectrum is a vital resource for any wireless technology. Unfortunately, most spectra are allocated but much of it are under-utilised or “white space”, according to the industry pundits.
And in putting it in perspective, ITU defines broadband as a “transmission capacity that is faster than 1.5 or 2.0 Megabits per second ((Mbits)”. The telecoms arm of the UN is also aware that spectrum is a very scarce resource globally and NCC is mindful of this too. To ensure its efficient utilisation, ITU manages the allocation of spectrum to member nations of the United Nations who belong to its telecoms arms. However, technology disruption is regularly causing diverse impacts in the assignment of spectrum. The evolution of the convergence of telecoms, broadcasting and technology services has made it imperative for nations to re-assign, re-allocate, and re-farm this scarce resource. And this is trending in Nigeria today.
NCC would seem to be going strong on this since Danbatta assumed office as the leader of Africa’s leading telecoms regulatory body. Lately, the regulator unveiled its strategic plans to allocate spectrum in different bands. These include the 2.6GHz, 42 GHz, 38GHz, and 23GHz which are billed to consolidate previous efforts when the 2.3GHz was allocated to Bitflux, the adoption of the Open Access Model to deepen broadband (which is part of the National Broadband Plan by the government). Already, two out of the proposed seven regional Infrastructure Companies (Infracos) have been licensed in Lagos and the North Central.
At the stakeholders’ meeting in Lagos, Danbatta re-echoed his stand that the emerging trend in the telecommunications market in Nigeria today is broadband which will certainly require massive deployment in terms of critical infrastructure so as to achieve the set target of government of 30 percent penetration by the year 2018. The EVC who was represented by NCC Director of Public affairs, Mr. Tony Ojobo, said that the growth in broadband traffic is on the increase and therefore resources would be required to avoid network challenges. He said the initiatives of NCC will help address the growing demands by operators for spectrum for high speed and high capacity links for data centric services; assist the commission’s drive for national Broadband Wireless Access (BWA) initiative and reduce the pressure and management challenges experienced with the traditional microwave frequency bands. According to him, “At this moment it is therefore paramount to take proactive measures to curb the impeding challenges. The opening up of 38GHz and 42 GHz band for use in Nigeria and the re-planning of the 23GHz microwave spectrum band is one of such measures.
“Currently, radio spectrums in the 38GHz and 42GHz bands are yet to be opened in Nigeria and the channelling plan for 23GHz needs to be reviewed in line with international best practices to meet requirement for higher throughput. The commission recognizes that it is important to review the channelling plan in some of the existing microwave frequency bands as well as to open and license other frequency bands that are commercially viable. This will enable efficient use of the spectrum. NCC is re-planning the existing 23GHz spectrum band by increasing its capacity availability from 7MHz to 28MHz based on the aggregated inputs from stakeholders from the previous engagements.
May 30 is the proposed switchover date from the 7MHz to 28MHz in the existing 23GHz frequency band. But the timeline for the utilization of the new 38GHz and 42GHz spectrums will take effect from between three to six month, depending on when NCC comes out with the final framework on the new spectrums, which will be awarded on a ‘first come-first served basis.
NCC Deputy Director, Spectrum Administration, Toyin Asaju, explained that the 38 GHz band is the range of Electromagnetic Frequency spectrum that falls within 37GHz to 39.5GHz. And that it is good for short range applications; point-to-point wireless links and for backhauling by operators among others. Both 42GHz and 38GHz have similar propagation characteristics. He said that the plan is part of measures to address the challenge of spectrum shortages in the country because the range supports an extremely high degree of frequency reuse due to high directivity of Antennas. He added that the Commission would, however, re-plan the 23 GHz Microwave Spectrum band, which already exists. This action would help curb congestions on the channels, improve Quality of Service and engender flexibility for options. He said that companies interested in the 38GHz and 42GHz must be ready to deploy Frequency Division Duplex (FDD) technologies, while responding to a question on whether NCC was thinking on deployment on Time Division Duplex (TDD). Industry stakeholders, service providers, investors, financiers, VAS providers and experts formed part of the audience that attended the session where modalities for the licensing were genuinely and comprehensively discussed.
Though the bands are new in Nigeria, Asaju said NCC benchmarked the pricing model for the 38GHz, 42GHz and 23GHz spectrums with the following countries; South Africa, United States, United Kingdom, United Arab Emirates, Australia, Canada and Uganda that have already licensed the spectrums. Though some of the stakeholders kicked against the price model presented by NCC, Asaju noted that the Commission arrived at its price by taking the average pricing of the countries listed. According to him, the price template is neither the highest nor the lowest. While some argued that economic imperatives in the countries benchmarked are different from Nigeria, Asaju assured the operators that Nigeria has lucrative demographics in addition to being a broadband hungry ecosystem. The argument of the cynics is that performance index and level of infrastructure capacities in the matured markets cited are far higher than that of Nigeria. But Lucky Ubani of Airtel Nigeria, said the NCC should take a second look at the pricing model to reflect the current realities in Nigeria.
NCC recently announced the auction of the 2.6GHz spectrum licence auction on a technology neutral basis and can be used to provide any telecommunications services.
But beyond the multiple spectrum releases to address bandwidth shortages, has the regulator also focussed its radar on the availability of budget gadgets in order to encourage faster uptake of the services to be driven by the spectrum enabled services. This is one of the questions that agitated the mind of some of the stakeholders at the meeting in Lagos. A concerned stakeholder had asked if the NCC had evaluated the numbers of Original Equipment Manufacturers (OEMs) and vendors producing devices so that operators can take advantage of the economies of scale in launching the services.
In Haiti, this has been well documented with the local production of tablets with Android functionality at the basic unit retail price of $100. And while it is open to franchising in Africa, with a further anticipation of lower prices, experts say that Nigeria has a better profile to do same for Africa.
Since NCC reassured that the OEMs are ready to take advantage of the local demographics seemingly clement for good business growth, the operators must not tarry in deploying the services once the spectrums have been allocated. Otherwise, the regulator must not hold back in activating the clause “use it” or “lose it” for operators who might want to demonstrate sluggishness in the usage of the spectrum after the award.
With the right synergy in the allocation and management of the spectra resources, combined with the nationwide deployment of metro and intercity fibre networks, the terabytes of capacity deployed by SAT-1, Main One cable, Glo-1 and MTN-WASCE at the nation’s seashores will find gainful utilisation for e-banking, e-commerce, e-learning, e-health, e-government, e-agriculture, mobile money, online-education, digital entertainment, and cloud computing among others. Broadband, according to the Managing Director of NATCOM, the brand owner of ntel, Kamar Abbass is in dire need in Nigeria. The noticeable gap, as he noted is in the supply end of the chain.