3G: NCC pursues auction plan amidst opposition
Jonah Iboma
The next few weeks are expected to witness the addition of new licences to those held by some Nigerian mobile operators following plans by the Nigerian Communications Commission to auction licences for third generation mobile services.
The industry regulatory body had last Friday issued a public notice stating an indicative timetable for the licensing of Spectrum in the 2 GHz and also 450 MHz bands. While the 2 GHz band is referred to as the 3G band, the 450Mhz, will be for Fixed Wireless Access.
The services associated with 3G include the ability to transfer simultaneously both voice and video communications and downloading information, exchanging email, and instant messaging. In marketing 3G services, video telephony has often been used as the killer application for 3G.“This public notice is issued to inform and update interested parties on the bands in which spectrum is to be made available,” the industry regulatory body said in a statement signed by its Head of Public Affairs, Mr. Dave Imoko.
The commission said its intention to license spectrum in the 2 GHz and 450 MHz bands was “to further strengthen and develop the telecommunications services in Africa’s most populous country, implement the objectives of the National Telecommunications Policy of the Federal Government of Nigeria, and the Nigerian Communications Act 2003.”
A clear point in the notice is that, “The allocation of spectrum in the 3G and 450 MHz bands would be by auction.” But while the auction of the 450Mhz frequency seems not to have attracted any comments, the planned auction of 3G services is not popular among many stakeholders. An increasing number of telecom experts and operators and are kicking against planned auction option being adopted by the NCC.
At two separate fora earlier in the month, chief executives of mobile phone firms kicked against the planned auction by the NCC.
The Chief Operating Officer of Globacom, Mr. Mohammed Jameel, and Chief Executive Officer of Celtel Nigeria Limited, Mr. Adebayo Ligali, called on government to review the planned auction and rather give the licences to big operators free of charge, considering the amount of investment they had made in their networks.
Jameel told the Minister of Information and Communications, Mr. Frank Nweke Jnr,. during a visit to the firm’s headquarters that auctioning 3G spectrum was not considered necessary by operators, given that operators had already upgraded their networks to support the services already and government needed to recognise this.
Similarly, Ligali, kicked against the plans by the NCC, claiming that if this was pursued in the way it was being fashioned by the agency, it could undermine the development of the 3G networks in the country as it had the possibility of raising the cost of spectrum and by extension translate to higher operating cost for those to provide the services.
Effectively, these telecoms chiefs are raising issues on the possibility of auction leading to a situation that is not sustainable for the industry as operators may be pushed into a situation whereby they try to outdo one another for the licences.
This is because the NCC had last year said there were only three slots available for 3G operators and that this made the auction imperative. Currently the mobile firms that can offer 3G services include the four existing mobile operators- MTN, Celtel, Globacom and M-Tel. Even some fixed wireless firms also can do same, though, their network reach is a major constraint.
Commenting also, a telecom engineer and Managing Director of Juniper Solutions Limited, Mr. Adegboyega Ojuri, noted that going through the auction route was not the ideal thing for NCC to do at this time. According to him, there appears to be a rush to license 3G when there is no proper appraisal of the utilisation of existing licences by operators.
He berated the industry’s regulatory body for acting poorly on the issues of quality of service and advised it to focus on this because it was more important than 3G services.
He said, “There are a lot of drop calls on services being provided by existing networks and nobody is compensating anyone. This is what I believe that the NCC should adequately address. The technology is there and operators should be made to improve on this rather than a rush for 3G auction.”
Ojuri also criticised the timing of the exercise noting that it was questionable when one considered that many other licences had just been issued and operators would be struggling to cope with them.
An important development is that the opposition against auction of 3G licences is not limited to Nigeria. In India, the GSM cellular industry lobby group, COAI, has made a strong pitch against auctioning the spectrum for 3G services.
As in Nigeria, the auction of 3G licences would require some occupiers of some frequencies to move to others but in the case of India, COAI said that if at all the regulatory body decided to auction the frequencies, the government should simply charge operators for the cost of relocating those sitting on the frequencies to others.
Generally, 3G auction has always created some form of tension in the telecommunications sector. In 2000, when the auction was carried out in Europe, there was a lot of euphoria about what the service would offer. Against the hype that 3G would offer video as a killer application, operators attempted to outdo one another in a quest for the licences and in the end auction prices yielded over $190bn. But this led to a global meltdown of telecom sector and delayed the launch of services by several years.
In fact, Some of the European businesses that paid a huge sum to buy the spectrum asked for their money back. Nearly 2,000 European business leaders were said to have quietly signed a petition demanding governments in Germany, the United Kingdom, France, Italy and other European countries to return the cash, then sell the spectrum all over again in a cheaper and fairer, way.
But commenting on the Nigerian situation, the Managing Director of Kemson Concepts Limited, Mr. Ben Aduli, said the issue of auction was an unavoidable reality. According to him, with the frequency limitation, NCC has no choice but to auction the frequency. Aduli noted that to give licences to a select group of operators and leave others who are also interested in it without an option to make a bid for the licences would be very difficult for the NCC to explain.
Certainly, may people will watching to see how the industry regulator gets round this challenge as it hold it auction in April.
The next few weeks are expected to witness the addition of new licences to those held by some Nigerian mobile operators following plans by the Nigerian Communications Commission to auction licences for third generation mobile services.
The industry regulatory body had last Friday issued a public notice stating an indicative timetable for the licensing of Spectrum in the 2 GHz and also 450 MHz bands. While the 2 GHz band is referred to as the 3G band, the 450Mhz, will be for Fixed Wireless Access.
The services associated with 3G include the ability to transfer simultaneously both voice and video communications and downloading information, exchanging email, and instant messaging. In marketing 3G services, video telephony has often been used as the killer application for 3G.“This public notice is issued to inform and update interested parties on the bands in which spectrum is to be made available,” the industry regulatory body said in a statement signed by its Head of Public Affairs, Mr. Dave Imoko.
The commission said its intention to license spectrum in the 2 GHz and 450 MHz bands was “to further strengthen and develop the telecommunications services in Africa’s most populous country, implement the objectives of the National Telecommunications Policy of the Federal Government of Nigeria, and the Nigerian Communications Act 2003.”
A clear point in the notice is that, “The allocation of spectrum in the 3G and 450 MHz bands would be by auction.” But while the auction of the 450Mhz frequency seems not to have attracted any comments, the planned auction of 3G services is not popular among many stakeholders. An increasing number of telecom experts and operators and are kicking against planned auction option being adopted by the NCC.
At two separate fora earlier in the month, chief executives of mobile phone firms kicked against the planned auction by the NCC.
The Chief Operating Officer of Globacom, Mr. Mohammed Jameel, and Chief Executive Officer of Celtel Nigeria Limited, Mr. Adebayo Ligali, called on government to review the planned auction and rather give the licences to big operators free of charge, considering the amount of investment they had made in their networks.
Jameel told the Minister of Information and Communications, Mr. Frank Nweke Jnr,. during a visit to the firm’s headquarters that auctioning 3G spectrum was not considered necessary by operators, given that operators had already upgraded their networks to support the services already and government needed to recognise this.
Similarly, Ligali, kicked against the plans by the NCC, claiming that if this was pursued in the way it was being fashioned by the agency, it could undermine the development of the 3G networks in the country as it had the possibility of raising the cost of spectrum and by extension translate to higher operating cost for those to provide the services.
Effectively, these telecoms chiefs are raising issues on the possibility of auction leading to a situation that is not sustainable for the industry as operators may be pushed into a situation whereby they try to outdo one another for the licences.
This is because the NCC had last year said there were only three slots available for 3G operators and that this made the auction imperative. Currently the mobile firms that can offer 3G services include the four existing mobile operators- MTN, Celtel, Globacom and M-Tel. Even some fixed wireless firms also can do same, though, their network reach is a major constraint.
Commenting also, a telecom engineer and Managing Director of Juniper Solutions Limited, Mr. Adegboyega Ojuri, noted that going through the auction route was not the ideal thing for NCC to do at this time. According to him, there appears to be a rush to license 3G when there is no proper appraisal of the utilisation of existing licences by operators.
He berated the industry’s regulatory body for acting poorly on the issues of quality of service and advised it to focus on this because it was more important than 3G services.
He said, “There are a lot of drop calls on services being provided by existing networks and nobody is compensating anyone. This is what I believe that the NCC should adequately address. The technology is there and operators should be made to improve on this rather than a rush for 3G auction.”
Ojuri also criticised the timing of the exercise noting that it was questionable when one considered that many other licences had just been issued and operators would be struggling to cope with them.
An important development is that the opposition against auction of 3G licences is not limited to Nigeria. In India, the GSM cellular industry lobby group, COAI, has made a strong pitch against auctioning the spectrum for 3G services.
As in Nigeria, the auction of 3G licences would require some occupiers of some frequencies to move to others but in the case of India, COAI said that if at all the regulatory body decided to auction the frequencies, the government should simply charge operators for the cost of relocating those sitting on the frequencies to others.
Generally, 3G auction has always created some form of tension in the telecommunications sector. In 2000, when the auction was carried out in Europe, there was a lot of euphoria about what the service would offer. Against the hype that 3G would offer video as a killer application, operators attempted to outdo one another in a quest for the licences and in the end auction prices yielded over $190bn. But this led to a global meltdown of telecom sector and delayed the launch of services by several years.
In fact, Some of the European businesses that paid a huge sum to buy the spectrum asked for their money back. Nearly 2,000 European business leaders were said to have quietly signed a petition demanding governments in Germany, the United Kingdom, France, Italy and other European countries to return the cash, then sell the spectrum all over again in a cheaper and fairer, way.
But commenting on the Nigerian situation, the Managing Director of Kemson Concepts Limited, Mr. Ben Aduli, said the issue of auction was an unavoidable reality. According to him, with the frequency limitation, NCC has no choice but to auction the frequency. Aduli noted that to give licences to a select group of operators and leave others who are also interested in it without an option to make a bid for the licences would be very difficult for the NCC to explain.
Certainly, may people will watching to see how the industry regulator gets round this challenge as it hold it auction in April.
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