Some stakeholders in the Nigerian telecommunications industry are still harbouring concerns about the 5G spectrum auction slated for next month, TEMITAYO JAIYEOLA reports
As the Nigerian Communications Commission looks set for the auction of 5G spectrum in the country on December 13, the number of spectrum slots available for the telecommunications companies and the prices to be paid remain major concerns in the industry.
When you send a chat on WhatsApp or stream a movie on Netflix, you are initiating wireless communication. This communication, though wireless, needs a medium to travel through.
To achieve seamless communication over devices, information is transmitted through radio frequencies. Radio spectrum refers to the specific radio frequency allocated to the telecommunication industry. Without spectrum, there can’t be communication over the telephone.
According to the Global System for Mobile Communications Association, radio spectrum is used to carry information wirelessly for a vast number of vital services, ranging from television and radio broadcasts, mobile phones and Wi-Fi, to baby monitors, GPS and radar.
After the Nigerian Communications Commission Decree No. 75 of 1992 was enacted, the NCC became responsible for radio spectrum licencing in the country.
In 2001, the commission issued digital mobile licences to three companies (Econet, MTN, and MTEL), kick-starting the telecommunications revolution.
The world has moved from 1G to 2G, 3G, 4G, and now 5G, which is gradually gaining momentum.
According to Ericsson, 5G is the fifth generation of cellular networks, almost 100 times faster than 4G, and will create never-before-seen opportunities for people and businesses.
Ericsson, a leading provider of Information and Communication Technology, said, “Faster connectivity speeds, ultra-low latency and greater bandwidth is advancing societies, transforming industries and dramatically enhancing day-to-day experiences.
“Services that we used to see as futuristic, such as e-health, connected vehicles and traffic systems and advanced mobile cloud gaming have arrived.”
The NCC said recently that it would only auction two lots of 100 MHz TDD slots available in the 3.5 GHz band to support the delivery of 5G services.
“In its drive to deepen broadband penetration in the country, the Commission has decided to auction two lots of 100 MHz TDD slots available in the 3.5 GHz band to support the delivery of ubiquitous broadband services,” it said in a document, titled ‘Information Memorandum on 3.5 GHz Spectrum Auction’.
According to the commission, the two lots of 100 MHz each in the 3.5 GHz band it would offer are in the 3500-3600 MHz and 3700-3800 MHz range.
During a stakeholders’ consultative forum on the draft information memorandum for the 3.5GHz spectrum auction, the NCC disclosed that it had three more spectrums to offer, but the process of unclogging them would take 24 months.
There are five major mobile licensees in Nigeria, namely Airtel Networks Limited, Emerging Markets Telecommunications Services Limited (trading as 9Mobile), Globacom Limited, NATCOMS Development Investment Limited (trading as Ntel), and MTN Nigeria Communications Plc.
There are other service providers offering fixed and wireless broadband services in the country.
One of the telcos, Airtel Nigeria Communications Plc, had in a comment to the NCC, said, “Airtel observes that only two lots of 100MHz TDD spectrum in the 3.5GHz band ranging from 3500–3600MHz and 3700–3800MHz is available for auction and there will be only two winners.
“The commission should make more slots available for auction.”
MTN told the commission that the reserve price of $197.4m was 136 per cent above the market price for 100 MHz of 3.5 GHz spectrum.
The NCC has said it would make three more slots available for 5G in 24 months.
According to the National Coordinator, Alliance for Affordable Internet, Olusola Teniola, all the operators will get 5G eventually, but those that get the spectrum first might be encumbered with recovering cost rather than focusing on network rollout, which might slow them down.
In an interview with our correspondent, he said, “As regards competitive advantage, that is a double-edge sword. Yes, this auction provides a sort of advantage, but will it give them a strong advantage in terms of the delivery of 5G in Nigeria, the answer is maybe.
“Because, if the two slots that are available to be auctioned is obtained at a very high cost, way over and beyond the reserve price of $197.4m per slot, then it makes it very difficult for the winner of that spectrum to roll out because they would have spent way above their budget for the deployment of 5G technology across the nation.
“It might actually slow them down, because obviously, you want to spend more on network deployment than on spectrum. And that is why during the consultative stakeholder meeting, the stakeholders raised their concerns.”
The Chairman, Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, told our correspondent, “I don’t know how the sharing will be done, but the number of slots available does not necessarily mean only two operators will have access.
“It is one industry. It is one national network; if you look at it, we currently operate a mix of 2G, 3G, and 4G, and now there would be 5G. It would still be a mix of these for the near future; so, those who can’t play in the 5G would play in the 4G and those who can’t play in the 4G would play in the 3G.”
He said as technologies evolve, operators would need to make the best commercial decisions.
“I can’t tell if there would be any competitive advantage, because we are currently operating a mix of current and previous technologies. We still have 2G, 3G, 4G, and now 5G, on the network. This will just improve access, not necessarily give competitive advantages,” he added.
Regarding the high price of spectrum, GSMA has urged governments and regulators to prioritise mobile broadband services — above revenue maximization — when awarding new frequencies.
“High 5G spectrum prices threaten affordable, high quality mobile broadband services whether for 5G or other generations. In the end, this is something regulators and governments have to get right if they want their country or region to be at the forefront of 5G innovation,” the association said.
The reserve price for the GSM auction in 2001 was $100m but operators who emerged as successful bidders ended up paying $285m each at the end of the auction.
According to GSMA, reserve prices are set in order to guarantee a minimum amount is paid for a licence at auction.
“But reserve prices must reflect the socio-economic value of the spectrum. When operators are forced to pay excessively high reserve prices, this limits the amount they can invest in the resulting networks which can result in lower quality and more expensive services for consumers,” it added.
The Executive Vice Chairman of the National Communication Commission, Umar Danbatta, recently disclosed that the commission hoped to make N632.39bn in 2022 from the sale of 5G spectrum, among other revenue sources.
The Alton chairman had at a stakeholder’s meeting said, higher spectrum prices might only lead to aesthetic 5G roll out.
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