Reactions trail proposed auction of slots in 2.3GHz spectrum band

Frequency spectrum is the life-blood of the wireless industry. Nigeria’s telecommunications industry risks losing huge foreign direct investments as a result of poor management of the national frequency spectrum resources, analysts have warned.

The nation’s telecommunications industry ranks among the top 10 in attracting FDI in sub-Saharan Africa and analysts told BuisnessDay that the sector could miss its slot as investors are already taking a second look at the industry. But more importantly, if this scarce national resource is not managed effectively, it could send a negative signal to the foreign investment community that Nigeria is not a serious place to do business.

National frequency spectrum refers to the entire range of electromagnetic communication frequencies available to a particular country, including those used for radio, radar and television. Fresh plans by the Nigerian Communications Commission (NCC) to auction additional slot of 30MHz on the 2.3GHz frequency spectrum to a new telecommunications operator is not going down well with the three existing operators on the frequency band.

Only recently, the telecoms regulator put out an advertisement announcing its plans to auction 1X30MHz to a new operator whilst the remaining 10MHz will be used as guard bands to eliminate interference. Mobitel, Spectranet, as well as Direct-on-PC (DoPC) who are currently operating on the band have all made their cases against NCC’s proposed auctioning of the remaining slots on the spectrum band.

According to the telecoms operators, it gives undue advantage to the new operator who will enjoy 30MHz as against 20MHz allotted to them. They advised the commission to allot 10MHz extra each to the three existing operators who have expressed willingness to negotiate and pay for this additional spectrum frequency.

The remaining 10MHz, the mobile operators went further will be used as guard bands to stop interference – a major technical issue significantly impairing delivery of efficient broadband services. Additional spectrum, according to these operators would provide them with the needed capacity to deliver efficient and affordable broadband services to consumers.

This would further assist in deepening internet penetration in the country. Speaking at a stakeholder forum on 2.3GHz band held in Lagos on Monday, Johnson Salako, chief executive officer, Mobitel, warned that if the commission sticks to the direction of auctioning additional slots on the band, it would further compound the problems of the current operators.

“There is negligible non-existent fixed wireline infrastructure in the country. It’s not viable to build a wireline network due to the exorbitant cost of Right of Way and other bottlenecks. International bandwidth cost is very high in comparison to other parts of the world,” Atul Ogiha, chief executive officer, Spectranet, said.

He said the absence of guard bands between existing operators in the 2.3GHz band has led to inter-operator interference and inter-system interference with other services on the 2.3GHz band. The direct consequence of this, Ogiha added has been compromised Quality of Service (QoS) which leads to poor customer experience, low adoption and by extension lower revenue for operators thus hindering expansion.

Ogiha said the commission needs to focus on finding lasting solutions to these problems. “We are not saying that we want to stop competition. But the best utilisation of the spectrum is to look for other frequencies to auction.

“There is the 2.5GHz, 2.6GHz and the 700MHz. Then, the NCC can provide existing telecoms operators with more capacity to deliver efficient services to broadband users in Nigeria,” Salako told BusinessDay in an interview on Monday.

“Limited spectrum restricts our ability to migrate from the current WiMAX based technology which is being phased out globally. Latest technologies with ability to provider cheaper and efficient broadband access depend heavily on adequate frequency spectrum.”

The implication, analysts told BusinessDay on Monday, is that if the three existing telecoms operators on the 2.3GHz band remain stuck on 20MHz of spectrum they risk being enmeshed in technology lock out.

This is a situation whereby limited spectrum hinders operators from migrating to newer technologies. On the contrary, Bienvenu Agbokponto Sogio of Qualcomms gave his company’s position on the direction NCC should take as regards the auctioning of the remaining slots in the 2.3GHz. He provided three options which the telecoms regulators could adopt to ensure effective utilisation of the scarce spectrum resource.

“Public auction 1X30 MHz to one new operator and use the remaining 10MHz as guard band between adjacent slots and at the edges of the band. The second option will be to license the remaining salts to the three operators on the band. This would imply adding 10MHz each to the three existing operators on the band and use 10 MHz as guard band at the edges and in between the three slots. The third one will be to license two additional operators.”

“There are already 13 operators offering broadband services in Nigeria. We need to find out why none of them is running a viable broadband network in the country,” Charles Anudu, chief executive officer of Swift Networks, queried. He said there are numerous challenges hindering operators from providing better services.

“Why are these businessmen not taking services to Kogi, Kaduna? The truth is that it is not viable. Until the consumer experiences true broadband, service uptake will remain very low,” he added.

The Spectranet CEO however said allocating extra 10MHz to existing operators was in line with global best practices. In a joint paper by the three present licensees on the band, he pointed out that governments of Hong Kong, China, Russia, New Zealand have all given 30MHz to operators on the 2.3GHz which has helped them provide affordable offerings well beyond mundane data services.”