Akunyili accuses agency of undermining tariff cut
By Sonny Aragba-Akpore (Lagos) and Nkechi Onyedika, Abuja
MINISTERIAL cancellation of the recently-auctioned 2.3 gigerhertz (GHZ) frequency licences was yesterday faulted by the Nigerian Communications Commission (NCC) and some affected companies.
The NCC cited what could be termed as an alleged encroachment on its functions as the regulator of the industry as stipulated by the Telecommunications Act of 2003 to buttress its point.
Meanwhile, the Minister of Information and Communications, Prof. Dora Akunyili, has accused the NCC of working against tariff reduction in the telecommunications sector.
The NCC had run advertorials in some national newspapers announcing the auction of the four licences that were available on first come, first served basis at a cost of N1.3 billion each.
Of the 40 applicants that expressed interest, three - Multi-links Telkom, Spectranet and Mobitel Limited - scaled the hurdles by paying the N1.3 billion each as at close of work on Friday, May 8, 2009.
But Akunyili dragged NCC Chief Executive Officer, Mr. Ernest Ndukwe, before the Economic and Financial Crimes Commission (EFCC) on the allegation of lack of transparency in the process, among others.
In a letter signed by an administrative officer in the ministry dated May 22, 2009, the NCC was ordered to cancel the licences and open up a fresh process.
While reacting to this yesterday, NCC Head, Public Affairs, Reuben Muoka, admitted that the NCC actually received the minister's directive and at a meeting held on Friday, May 22, 2009, the minister conveyed her intention to cancel the auction process, but the NCC strongly advised against it, pointing out the far-reaching consequences of such action both from the legal and regulatory points of view.
Nonetheless, the minister went ahead to cancel the licences, Muoka said.
The NCC thinks its powers are taken from Section 121 sub-section 1 of the Communications Act of 2003 which says "the commission shall have the sole and exclusive power to manage and administer the frequency spectrum for communications sector and in that regard to grant licences for and regulate the use of the said frequency spectrum", while sub-section two of Section 121 explains the power of the minister to wit:
"The power of the minister under the Wireless Telegraphy so far as they relate to communication are vested in the NCC."
Section 33 of the Act vests the powers to issue licences on the NCC "by way of Class or individual licences on such terms and conditions as the NCC may from time to time determine."
In reactions to the cancellation, two of the three beneficiaries, Mobitel and Multi-links Telkom, have threatened to seek redress over the matter.
In two separate statements signed by the Executive Chairman, Mobitel, Mr. Johnson Salako, and Multi-links Telkom Chief Corporate Affairs Officer, Mrs. Ijeoma Abazie, both companies explained their positions, describing the minister's action as a travesty of justice.
While describing the purported cancellation as an infringement of Mobitel's rights, Salako said the only way to renew investors' confidence in the country is to uphold the auction.
Salako said: "It is important to note that Mobitel has been revived by a new breed of dynamic and success driven individuals, who place a high premium on integrity, professionalism and excellence in performance and service delivery.
"The old Mobitel stopped operations in 2005 after it went into receivership.
"Following the acquisition of Mobitel by a consortium led by Omni Ventures in 2008, the new management went through due process as published by the NCC to bid and pay for spectrum in the 2.3GHz band. Prior to this, the new management also went through a process of negotiation with all creditors to whom the old Mobitel had been indebted, eventually paying off about N3.5 billion in accumulated debts in readiness for commencement of operations by the new owners of Mobitel."
Salako further explained that: "Following allegations that the NCC granted Mobitel a waiver for the sum of N246,452,421.90, we would like to state that as at the time that the new management of Mobitel took over, it was discovered that the old Mobitel owed NCC the sum of N746,452,421.90, in licensing fees, including the three years when Mobitel had been out of operation. In May 2008, Mobitel paid the NCC the sum of N500,000,000., and thereafter applied for a waiver for the remaining part of the debt owed by the old Mobitel. The waiver request was granted in October 2008 in recognition of the fees that had accrued during the period that the old Mobitel was out of operation.
"Furthermore, it was also being alleged that Mobitel's ability to raise N1.3 billion in five days was suspect because the time was insufficient for other bidders to raise the amount of funds required. We want to categorically state that we did not have any prior knowledge of the tender for the 2.3GHz spectrum band and we have irrefutable proof that the funds were only sourced for after the invitation to tender was published by the NCC.
"Having said all of the above, it goes without saying that Mobitel has gone through the published due process and met all requirements for the award of spectrum in the 2.3GHz band. The company's legitimate expectation is to receive a formal letter of award for this spectrum."
Mrs. Abazie said: "Multi-Links Telkom is a company that is truly guided by a strict code of corporate governance specifically the Sarbanes Oxley Act and the Nigerian Corporate Governance Code and would not do anything or indulge in any business practice that contravenes sound ethical practice and/or obstructs the course of fair competition in line with the provisions of the above Act and Code."
She explained that Multi-Links Telkom applied for the 2.3GHz Spectrum Licence based on the advertisement placed in the media and the Internet by the regulatory body; the Nigerian Communications Commission (NCC). Multi-Links Telkom ensured that it made the required payment for the 2.3Ghz spectrum licence in line with the NCC's stipulated deadline for same being by close of business on May 8, 2009. The NCC had also expressly stated in the advertisements that grant of the licence would be on a first pay first served basis and it was based on this that Multi-Links Telkom qualified for the licence.
"Regardless of the clarity of the facts and situation, a section of the media had deliberately slanted and continues to slant their report to suggest that one of the applicants in the licence process was dropped for another, even when it is very clear that only three out of the four licences were actually awarded. It might have been easily understood how it is possible for anyone to come to such conclusions had there been a case of over-subscription of the licences but this is not the case currently with one licence still remaining even at the close of the sale process," the statement added.
In the meantime, Akunyili has accused the NCC of undermining tariff reduction in the sector.
Speaking when members of the House of Representatives Committee on Communications visited the ministry, Akunyili alleged that NCC had been most unco-operative in the bid to bring down mobile telephone charges in the country.
Meanwhile, members of the committee have asked the minister to have a rethink about the re-branding campaign, stressing that instead of talking so much about re-branding, government should put in place necessary infrastructure that would enable Nigerians live a comfortable life.
A member of the committee, Mayor Eze, said that Nigerians deserve to have access to good education, free medicare and other basic necessities of life, adding that unless this is done, the re-branding campaign would just be a mere slogan.
He said: "You don't talk of re-branding in a country where the citizens don't have access to free medicare, good education and lack access to basic amenities. So, when you talk of re-branding, it appears like a white sepulcher, it is the duty of the Executive arm of government to make sure that those who are managing the resources are doing what they are supposed to do. I have my fear, It is not enough to go out and say come to Nigeria and invest, the international community has their High Commissions here and they know about this country even more than some of us. It is not enough to say, "Good people, do this, do that, they know whether we are good or not", they know what Nigerians are going through. Until that is done, this will continue to be a slogan.
"In an unjust society, people should not keep quite, it is the duty of all of us to talk. In Nigeria, we know that the long period of military rule in a way has programmed the civil servants to a condition towards taking directives from the executive alone and it is difficult for them to know that we are in a democratic process. If you are talking about re-branding and Nigerians are leaving the shores of this country every day to go to lesser places, it shows that something is fundamentally wrong."
Another member of the committee, Patrick Ikiahare, who accused the Presidency of inconsistencies and constitutional breaches, said: "You don't build something on nothing but if you do, it will collapse, there have been a lot of inconsistencies in this government, yet we are talking about re-branding. The President has been involved in a lot of constitutional breaches, we cannot re-brand without taking positive steps, and we should look beyond rhetorics of propaganda of a sort to do concrete things to better the lots of Nigerian. The health, education and every other sector have collapsed, what is this government doing to improve the lives of Nigerians.
The minister told members of the committee she had held series of meetings with telecommunications operators on the need to reduce their tariffs but the meetings have not yielded positive result because of the posture of the commission on the issue.
She said: "When we met with telecoms operators early this year, one of the things we said we were looking forward to was better interconnectivity, lower drop calls and better quality service. I also remember that day I said Nigeria is the only country where people carry three to five telephones and it shows that something is wrong.
"We also told them that they must reduce the tariff because of the sheer population of this country. We told the operators to reduce their tariff as we cannot be one of the countries in Africa with the highest tariff. After that meeting, I held a private meeting with the Executive Vice Chairman of NCC and I got his views and thereafter I held one-on-one meetings with the operators.
"I am trying to avoid being sensational but sometimes the more you avoid being sensational the more you are seen in the bad light. The providers were not forthcoming because I was talking from the ministry as an overseer and their regulator (NCC) was not giving me support. I have avoided saying this but the regulator has not given me the needed co-operation; in fact, you need to listen to the regulator arguing that tariffs cannot be reduced. It is like the Minister of Health talking about fake drugs when the Director-General of NAFDAC is not ready to co-operate."
Akunyili also said that she had come under heavy criticism from "sponsored write-ups" because of her stance on the need to reduce the cost of telecommunications services. "At a point, I started feeling sorry for myself and decided to call the providers one by one, to beg them to save me from public ridicule, because Nigerians want tariff reduction," she said.
The minister said Nigerians were looking forward to improved telecommunications services in the area of lower drop calls, number portability and better interconnectivity.
The Chairman of the Committee, Hon. Dave Salako, had explained that the visit would assist the committee to appreciate the challenges facing the ministry.
