Spectrum refers to the radio frequencies allocated to the mobile communications industry and other sectors for communication over airwaves and it is the means through which wireless communication is realized. A substantial number of what have become standard everyday services and equipment today, use radio spectrum to wirelessly carry information. Examples are mobile phones, television and radio broadcasting, aviation systems and air traffic control, satellite communications, maritime controls and navigation, baby monitors, remote controls, remote car keys, cordless phones, Wi-Fi, Global Positioning Systems (GPS) and radar. In an information driven and connected world, the dependence on radio frequency spectrum cannot therefore be over emphasized.
Radio spectrum is a critical but scarce and finite national resource that needs to be optimally and efficiently managed in order to support the drive for socio-economic development. Increasing subscriber demands for faster internet, larger data capacity, higher quality video and an evolving array of services globally and in the Nigerian telecommunications sector will continue to drive and exponentially increase the industry’s appetite for both coverage and capacity spectrum and exert a lot of pressure on the national regulator, the Nigerian Communications Commission (NCC). Regulators globally are now under a lot more pressure to not only release new spectrum bands to stakeholders in an affordable, timely, fair and transparent manner but also monitor and ensure the optimal use of already assigned spectrum. The need to ensure the optimal and efficient use of already assigned spectrum bands highlights the importance of having a defined framework for spectrum trading activities. The spectrum trading initiative being explored by the NCC is therefore a laudable and welcome initiative as it permits the trading of assigned spectrum that is either not being utilized or is under-utilized to an operator that requires same.
The NCC recently issued the draft Spectrum Trading Guidelines 2017 (the Draft Guidelines). The Draft Guidelines acknowledge the importance of liberalizing the spectrum management policy of the NCC with a view to – an efficient and flexible transfer of spectrum to users who value it most; lessening the barriers to market entry by allowing flexible access to spectrum; deepening competition and promoting innovation by enabling entrepreneurs to acquire spectrum and offer new services. The Draft Guidelines defines Spectrum Trading as ‘a spectrum management transaction which covers any or all of Spectrum Transfer, Spectrum leasing and Spectrum Sharing, in which a seller trades all or some of its Spectrum licence (rights and obligation) to a buyer, following a commercial transaction approved by the NCC.’ This allows spectrum assignees to enter into mutually beneficial commercial arrangements and derive financial benefits from unutilized or under-utilized spectrum and in the process make same available to other operators for the provisions of services.
Some of the trading eligibility requirements include – only a party that already holds a licence issued by the NCC can participate in spectrum trading; both the seller and buyer must be in good regulatory and financial standing with the NCC ; no breach of the licence terms exist. A buyer will be allowed to use the spectrum acquired through trading to deploy any technology. The traded spectrum should be used without causing harmful interference to the parties or other users. The NCC may at its discretion conduct a public or private inquiry, if in its opinion a proposed transaction will negatively impact competition. An administrative fee of 1% of the gross proceeds of the transaction is payable to the NCC. Where the spectrum was initially acquired through an administrative process, the seller shall in addition, pay to the NCC 60% of the net proceeds of the transaction. The prior written approval of the NCC is required before any spectrum can be traded.
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The continuing increase and apparently insatiable demand for faster internet and larger data capacity to meet new wireless services can be met by not only the release of more spectrum by regulators, but also by the efficient and optimal use of already assigned spectrum by operators. By recognizing and providing a frame work for spectrum trading in Nigeria the NCC will encourage spectrum assignees to release unutilized or under –utilized spectrum to other stakeholders for the deployment of services thereby ensuring the optimal use of the limited spectrum resource. By providing a regulatory framework for Spectrum trading, the government is further able to retain a measure of control over how spectrum is used and traded and also laying the foundation for a more efficient spectrum management process in the telecoms industry in Nigeria. In addition, it is projected that permitting spectrum trading would further support the achievement of the targeted 30% broadband penetration by the end of 2018, presently broadband penetration is estimated at 21%. We therefore look forward to the swift finalization and issuance of the Spectrum Trading Guidelines by the NCC.
ROTIMI AKAPO
