ADVERTISEMENT

ADVERTISEMENT

By Sonny Aragba-Akpore

Aparthy by operators occassioned by lack of confidence in the near comatose economy of the country is believed to be one strong reason why licencees for the fifth generation (5G) telecommunications services may not be able to provide robust services for now.

Although, sizeable investments have been ploughed into project 5G ,the insensitivity of government officials to the management of Spectrum, a scarce national asset, may have added to reasons why 5G is far away.

Spectrum is a major determinant for telecommunications and broadcasting services and how it is managed by government determines the success or failure of such services.

When the Ernest Ndukwe led Nigerian Communications Commission (NCC) opted for technology neutrality in 2001 ,leading to the Digital Mobile License (DML),auction, it first sought and obtained Spectrum for that purpose.
Ndukwe, a consummate engineer had solicited permission from his board then led by an unforgettable technocrat, Ahmed Joda.

The National Frequency Management Commission granted the NCC request to go ahead and subsequently assigned such Spectrum to the would-be bidders for the DML.

The auction beat book makers predictions when it came out as a very transparent exercise that became a primus inter pares for global DMLs.

But there was a minus for the NCC in that exercise which cost the Mike Adenuga led Communications Investment Limited (CIL) one of the winners of the auction a monumental loss, Harry Nanke, the spokesman for CIL then lamented the Adenuga’s CIL topped all other bidders including MTN, Econet Wireless Nigeria and others.
Adenuga’s CIL ran Into troubled waters because its Spectrum was encumbered.

Motophone Limited, one of the 33 companies that benefited from the GSM bazaar between 1992 and 1999 under the “old school “ NCC when issuing licences to friends ,associates ,cronies and family members was a way of life, but was cancelled by Ernest Ndukwe and his team.

Motophone believed to belong Chagoury and Chagoury went to court to challenge the NCC on the grounds that the Spectrum assigned to it still subsisted and that the regulator had no moral rights to reassign it without showing course.
While this matter lingered, Adenuga’s CIL sought for comfort as the deadline for payment for the hard won license drew near.

It got none from the NCC and so lost not only the license but also the $20million deposit it paid before the auction.

This became an albatross for the NCC even when it played by its own rules.

Two very big legal minds, Aare Afe Babalola(SAN) who represented President Olusegun Obasanjo at the auction while Mr.Paul Usoro (SAN) who stood strong with the NCC couldn’t help the situation. Both men were helpless because they were uncomfortable to swim against the tide.

But the situation couldn’t be remedied as the rules were very clear as to what government wanted to achieve.
If the NCC had bent the rules,the efforts put in to achieve a transparent exercise would have been truncated by partisanship purposes.

Ndukwe and his team held its ground and saved the country from imminent embarrassment.

That was the eminent role Spectrum played then and the rules were supposed to be adhered to until 2021 when in a desperate move to impose 5G on Nigerians and generate revenue for government, a Minister who knew next to nothing about 5G and an embattled Chief regulator went ahead to conduct an auction and assigned Spectrum by special arrangements.

MTN and Mafab Communications, the pioneer 5G licencees and later Airtel Nigeria are yet to justify the acquisition of the scarce national resource, the spectrum.

Spectrum is a radio frequency for telecommunications and broadcasting services and because of its scarcity, it does not come cheap. And operators know so.

This explains why 5G remains elusive despite the efforts of the operators.

Apart from the financial outlays and the crisis of the economy, operators are plagued by a myriad of problems including the spectrum they were assigned.

The higher portion of the spectrum deployment requires more infrastructure investment to provide same coverage as the lower one. In a rough perspective, one can say 2 -3 times amount spent in 2001 is required today to fully put the 5G on equivalent coverage. But the resources are not readily available.

For instance regulators of spectrum around the world know this so well. Operators are wooed in using higher spectrum because of the economic benefit derivable but with government relaxing the revenue or not collecting it at all. This will allow the operators divert the fund to roll out in lieu of revenue to government. Win -win for operators and citizens.

It is not clear whether there are incentives and rules of the thumb for execution of 5G services or the operators are simply waiting for the right time tying investments down without any thought for returns.

“The last 5G auction was revenue focused not economic benefit to Nigeria. The revenue has been collected and the benefit has not been felt by Nigerians for almost three years post-auction period. Nigerians may not see any meaningful 5G deployment in the nearest future” according to a Spectrum analyst who wants to remain anonymous.

“For instance the economics of spectrum dictate that there has to be demand for it before it is assigned to an operator to put into use. It is a national resource and its assignment has to be judiciously done to facilitate national economic growth”.

Its positive impact cuts across other sectors as well.

“Remember the GSM auction of the 2001 that revolutionized telecommunications sector in Nigeria and continuous to impact on how we conduct our lives today. “

MTN Nigeria and Mafab Communications emerged as winners of the 5G auction in December 2021, with Airtel Africa to follow in January 2023.

By implication, MTN and Airtel which already had substantial investment in 2G,3G and 4G and corresponding physical infrastructure on ground, the deployment of 5G would come as a network over-lay and could be seamlessly realized but that didn’t happen.

“Advancement in wireless technologies is synonymous to quest for higher range of the spectrum. Such is the trend for deployment of 1G, 2G, 3G, 4G and 5G. Currently, 6G technology is on trial in a number of administrations around the world.

By rule of thumb in spectrum management, putting higher spectrum into use requires more investment and additional infrastructure in the telecommunications operations. What will take a new entrant in our present stage of telecommunications to roll out 5G network can only be best imagined” the anonymous analyst explains.

As another analyst puts it “MAFAB emergence as winner of one of the 5G slots in the auction exercise raised concerns about the possibility of putting the spectrum into use as MAFAB had no existing network to lay on. It is joining the network game when the other players have spent years building generations of technologies “

“For MAFAB, it is equivalent to rolling out a network from the scratch with the expectation to compete with already established networks. This remains a daunting task from which ever perspective it is viewed”.

Another expert thinks that “the result is that a national resource that could have been otherwise put into use for the benefit of all the citizens and national economic growth is now dormant.

A new entrant can never meet up with 5G roll out as it has no infrastructure to lay on and be able to compete. At best MAFAB can only speculate and wait till some operator who may necessarily require it comes forward”.

The initiators and architects of the auction exercise were the ones in the best position to explain reason and timing of the exercise. There was no officially commissioned study which result could have indicated the need for the auction of 5G at that time.

In other words, no identified demand for the auction. Most industry observers believed that the 5G spectrum auction was not aimed at the sector growth but the officials involved were making effort to make revenue for the government of the day for reasons known to them only.

How could a little-known player like MAFAB with no infrastructure on ground be considered for participation in the exercise and even won a slot considering the fact that other competitors have over 20 years of continuous roll out and investment ,another expert queries.

The industry also observed that among the big four, only MTN and Airtel participated in the auction exercise with 9Mobile and Glo staying away, even during the second cycle.

It was generally thought that the operators had little interest in the 5G spectrum as they were occupied with consolidating the 4G Network, competition, high cost of operation, harsh business environment and host of others.

MTN and Airtel acquired the spectrum with great uncertainty of the future but not for immediate benefit. It was not on their priority list of things to do.

Little wonder why the 5G services are not ubiquitous. Reliable statistics showing performance of the 5G are rarely come about.

“But many Nigerians have not seen it in service. When MTN and Airtel are not in a hurry to roll out, the MAFAB lacks the wherewithal to roll out and the 9Mobile and Glo are not interested in the roll out ab-initio, the auction of the 5G spectrum can best be judged as not successful.”

Common rule of thumb in spectrum use considered by operators and investors in telecommunications is that when the spectrum value is doubled, the investment in infrastructure doubles.

It is not clear whether there are incentives and rules of the thumb for execution of 5G services or the operators are simply waiting for the right time tying investments down without any thought for returns.
And as we wait for the services, our sympathies are with the operators because government has collected the license fees and moved on.