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Sale of 700MHz band: A ploy to deprive Nigerians of mobile broadband service

By Sulaiman Abdufatah
07 October 2015   |   3:18 am
Over the last few weeks there has been an outcry reported across numerous media outlets following the National Broadcasting Commission’s (NBC’s) sale of a portion of spectrum in the 700MHz band to MTN Nigeria

Mobile-deviceOver the last few weeks there has been an outcry reported across numerous media outlets following the National Broadcasting Commission’s (NBC’s) sale of a portion of spectrum in the 700MHz band to MTN Nigeria in a deal apparently lacking transparency and which was contrary to an agreement reached by all members countries of the International Telecommunications Union (ITU) in Geneva.

In 2006, member nations of the ITU Regional Telecommunications Conference (of which Nigeria is a member) reached an agreement to switch over from analogue television broadcasting to digital broadcasting by June 17, 2015 (the Digital Switchover). The agreement was necessitated by the increased demand for spectrum by the telecommunications industry to provide extensive wireless broadband. Whilt digital broadcasting requires much less spectrum usage and offers enhanced picture and sound quality to users, analogue broadcasting offers lower picture quality and utilizes much more spectrum resources.

Nigeria, through the late President Umaru Yar’Adua, in 2008, proactively initiated the process for the completion of the migration by setting up a Presidential Advisory Committee on Transition from Analogue to Digital Broadcasting (PAC) comprising representation from the Federal Ministry of Information and Communication, NBC, Nigeria Communications Commission (NCC) and the print and electronic media agencies amongst others. The PAC was mandated to advise the government on actions relevant to the smooth transition from analogue to digital broadcasting, the quantum of the expected digital dividend spectrum following the migration, and thereafter recommend an appropriate regulatory framework to guide the release of the spectrum for mobile broadband services.

Having failed to meet the Digital Switch over date of June 17, 2015 set by the ITU, a new deadline of June 20, 2017 was set for completion of the migration. It, however, appears that the NBC tried to circumvent the Geneva agreement and the mandate of the PAC, by proceeding to sell a portion of the 700MHz spectrum which it was under mandate to release under the guise of issuing a Digital Terrestrial Television (DTT) Licence to MTN. The NBC claims that the sale of the 700MHz spectrum to MTN is to fund the acquisition of Set Top Boxes (STB) which is required to enable analogue TV sets receive digital content once the migration is completed. The justification given by Emeka Mba, the Director General of NBC, is however flawed on many grounds as the sale in itself, to a large extent, precludes the actualisation of the transfer and reallocation of the spectrum as intended by the ITU. The main objective of the Digital Switchover is to ensure that all analogue TV broadcasters within the 700 MHz spectrum band are migrated to lower spectrum bands i.e. 470 – 694MHz where they can offer digital broadcasting services while the 694 – 790 MHz (700MHz) would be freed up and made available for the provision of mobile broadband services.

The unilateral sale of the 700 MHz spectrum by NBC to MTN, under the guise of a Digital Terrestrial TV Licence, which is curiously a broadcasting service that was planned to vacate the 700MHz spectrum, therefore, defeats the objective of the digital migration. If the NBC was keen to fund the acquisition of the required equipment, one would have thought the more prudent option would have been to issue the DTT Licence within the lower spectrum band of 470MHz – 694 MHz which the NBC has control of and which digital broadcasting was eventually planned to be offered. Licensing a DTT service within the spectrum band that was meant to be freed up means that the 700 MHz spectrum still remains occupied unless of course the NBC’s intention was to give MTN an early advantage to the spectrum at the expense of other telecommunication service providers.

Contrary to global best practice and precedent for similar sales, the NBC did not publicise its intention to sell neither did it open up the sale to other interested and qualified parties, that being the standard for the sale of such a scarce and critical national asset. The sale of such an asset cannot be done in a clandestine manner as international best practice demands that an open and consultative process is adopted, akin to what the NCC has adopted over the last 15 years prior to the sale of the Digital Mobile Licences, Unified Access Service Licences and more recently, the Wholesale Wireless Access Service Licence issued to Bitflux in 2014.

These consultations facilitate discussions which will guide the development of an Information Memorandum that will advise on the spectrum blocks available for sale, the maximum number of blocks that can be purchased by an interested party, the technical and financial pre-qualification criteria required to submit a bid, the reserve price for each spectrum block, the sale methodology and the coverage obligations that must be achieved. NBCs approach failed to meet up to standards in all these respects as the lack of consultation and transparency in the sale beclouds the methodology for arriving at the purchase price and the corresponding obligations amongt other issues.

The NBC claims that it adopted an innovative solution which enabled it secure up to 50 per cent of the required funds for the Digital Switchover, an example which other African countries can follow. It is, however, worthy to note that in most African countries where portions of their spectrum was sold to telecommunications operators, the broadcasting regulators perform the dual role of regulating both the broadcasting and telecommunications services as such the single regulator represented and was the custodian of the interests of both broadcasting and telecommunication service providers. This possibly explains the composition of the Presidential Advisory Committee to ensure that the interests of all stakeholders were adequately addressed during the digital migration process. The NBCs myopic view and recent action shows a total disregard of the collaboration and balanced interaction intended by the government in setting up the committee.

Contrary to the assertions by Mba, the approach lacks innovation and is far from providing the lead for other African countries to achieve digital migration. Tanzania, despite being one of the poorest countries in Africa, completed the digital migration on the April 30, 2015 through a single partnership with Star Times. Star Times brought about an innovative solution by assisting with driving the local production of Set Top Boxes, which is the equipment required to facilitate the digital switchover, and securing a reduction in import levies for the equipment components. Today, Tanzania has achieved 100% digital signal coverage using DTT while freeing up the spectrum required for the provision of broadband services. The NBC should therefore take a cue from what has happened in Tanzania rather than adopt a process which will deny Nigerians and other citizens of the continent the benefits of the digital migration if a similar approach is adopted by other African jurisdictions.

The NBC’s actions is even more worrisome as unconfirmed media reports state that it allegedly had previously given out a portion of the 700MHz spectrum to another telecommunication services provider under a different transaction. If this allegation is true, the impunity at which the NBC now disregards international agreements and the mandate of the PAC of which it is a member can only be interpreted as economic sabotage.

The benefits of the digital dividend migration can only be imagined as a recent World Bank study indicated that a 10 per cent increase in broadband services penetration in low and middle income countries would yield an additional 1.38 per cent in Gross Domestic Product (GDP) growth. With Nigeria experiencing a decline in its earnings due to the rapid decline in the price of crude oil and further concerns that the economy may fall into a recession, the NBC’s approach is at variance with the economic objectives of the country to diversify its GDP earnings. Also, it can only further deny the country of the opportunity to enhance its GDP earnings through the deployment of world class broadband services.

In light of the numerous concerns arising out of the sale of the 700MHz spectrum by NBC, the adverse impact on the telecommunications industry, lack of transparency and the relegation of national interest for the benefit of a few, it is necessary that the transaction be immediately reversed and an investigation initiated by the relevant Government agencies into the circumstances surrounding the decision to prevent a further depletion of this scarce spectrum resource.
Abdufatah, a policy and public affairs commentator, writes from Abuja.

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