In what may appear as eating their words to some people, the Nigerian Communications Commission (NCC) said it did not approve the sale of spectrum of Visafone to MTN despite approving 100 per cent shares acquisition of the distressed telco. The spectrum sale, NCC said, will be brought to the attention of stakeholders in due time.
It will be recalled that around December 2015, the telecom regulator gave the approval for the sale of Visafone Communications Limited, Nigeria’s surviving Code Division Multiple Access (CDMA) operator to MTN. By acquiring Visafone, MTN was allowed to utilize Visafone’s 800MHz spectrum to launch fourth generation Long Term Evolution (4GLTE) services – standard for high-speed wireless communication for mobile phones and data terminals.
To be sure, the word spectrum refers to a range of radio-waves that are used for communication purposes. This includes the FM or AM radio broadcasts that you listen to on the way to and from work, and even other wireless forms of communication like Bluetooth and Wi-Fi. Your smartphone also uses these same radio waves to transmit data, and the difference really lies in the specific frequencies in use, and of course, the technology used to convert these waves into something useful.
Telecommunication spectrum starts from 800MHz and goes up to 2300MHz. Beyond that, there are the unlicensed bands used for technology such as Wi-Fi and Bluetooth – Wi-Fi used to be 2.4GHz (2400MHz) and has started to shift to the 5GHz. According to the GSM alliance, the most suitable spectrum for telecommunication is in the 400MHz to 4GHz range and these bands are used globally for various telecommunication purposes.
Prior to the Visafone sale to MTN, Globacom was the only operator that had a license on the 700MHz spectrum freed up by the migration from analogue to digital television under the President Goodluck Jonathan’s administration. Under the deal, Visafone was allowed to secure the 800MHz spectrum which it sold to MTN later.
By selling the spectrum to the operators, experts envisaged significant increase in broadband penetration enabling Nigeria attain its targeted 30 per cent in 2018. Increased broadband will have a multiplier effect on internet access and penetration even beyond big cities like Lagos to the rural areas. It will also provide high quality services to majority of internet users while keeping prices affordable.
The NCC has explained that its no-sale position was informed by the perception that MTN was becoming a monopoly in the sector it deregulated in 2001, at the expense of effective competition.
“While the commission recognizes that effective competition in the various communications markets in Nigeria will encourage sustainable investment, growth and innovation to the benefit of the entire industry and its consumers, it also acknowledges that existing market conditions may preclude effective competition in certain market segments,” Garba Umar Dambatta, Executive Vice Chairman and CEO, NCC said.
NCC’s latest disclosure may seem awkward as only a few people are privy to the full details of the deal between Visafone and MTN actually is. The public may appreciate a full copy of the deal. However, an expert BusinessDay spoke with noted that it was possible to selling the CDMA without transferring the spectrum.
Also, some stakeholders have wondered why the NCC went ahead to approve the sale of Visafone when it clearly had issues with market equality and was not in agreement with the operator gaining access to the spectrum.
Although internet penetration has increased significantly, in a recent study, PricewaterhouseCoopers noted that the increase was primarily limited to big cities. Fixed and mobile internet penetration was at 39.7 per cent by the end of 2015, the report. What that buttresses is the need to urgently address the issue of access beyond the big cities. The NCC has to deal with the latest setback quickly in order not to interrupt the drive towards digital connectivity.
FRANK ELEANYA
