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APRIL 2, 2007 VOL. 20. NO 25

A Welcome Boost

**Ernest Ndukwe**

As the Nigeria Communications Commission (NCC), issues four third generation (3G) licenses, plans are on the way to make 3G -compliant phones accessible
By Oji Odu
Six years of Global System for Mobile (GSM) communications services in the country has greatly impacted on the socio-economic lives of the people, from making communication less stressful to the added advantage of corporate social responsibility whereby the GSM companies undertake various social development projects to better the lives of the citizenry.
However, it is notable that these achievements are not without hitches such as poor service delivery, largely typified by incomplete calls, interconnectivity hurdles, poor voice delivery and indiscriminate billings among others, which have contributed in no small measure in short-changing subscribers.
The Nigeria Communications Commission (NCC), the body responsible for regulating activities in the industry, has at one time or the other set standards of operation which have not only sanitised the telecommunication industry but developed the sector.
On Monday, March 19, 2007, the NCC actualised its desire for third generation (3G) licensing in the country for both commercial and regulation purposes when it granted license of operation in the spectrum to four companies - Alheri Engineering belonging to Dangote Group, Globacom Limited, MTN Nigeria Communications Limited and Celtel Nigeria Limited at $150 million each.
NCC’s Head, Public Affairs, Dave Imoko, said in a recent release that the commission granted the 3G license to the four companies because they were the only ones out of the 17 applications it received, who met the specified requirements for the award of the spectrum at the deadline of 5 p.m on Friday, March 16, 2007.
“The NCC is pleased to announce that by the applications deadline of 17.00 hours on March 16, 2007, it had received four application. These applications were from Alheri Engineering Company Limited, Celtel Nigeria Limited, Globacom Limited and MTN Nigeria communication Limited” the statement said. According to the NCC, the development led o the cancellation of the proposed auctioning of the spectrum slated for April 2, 2007, as the four applications tallied with the number of available licenses. The release by the commission said, “The four applicants, submissions were evaluated with respect to the compliance details outlined in the Information Memorandum.
“Each applicant was found to have been fully compliant. In these circumstances, where the number of applicants matches the number of lots, further allocation processes are required. As such, the NCC is pleased to announce that each of the applicants has been successful in its bid for a 10MHZ lot in the 2 GHZ band.”
According to The Source’s findings, the pre-requisite stated in the Information Memorandum of the NCC for successful bidding included that the bidder must have been licensed by the NCC in the past. Foreign Operators applying must ally with already existing operators who already hold licenses. Also, upon application, potential bidders must pay 10 percent of reserve price ($15 million) bond payment,.
The NCC also revealed that it has ruled out the exclusivity period for the 3G which was not the case of the Digital Mobile License (DML) in 2001 which had a five-year exclusivity period and lapsed in February 2006. After this, the Commission came up with the United Licenses which it issued same firms.
The Source’s investigations reveal that the ruling out of exclusivity period for the 3G licenses shows that the 3G spectrum is still open for other operators to join in future.
Meanwhile, the NCC said that the winners are expected to pay the license fees, being the reserve price less the intention to bid deposit of $15 million within 14 business days of the award of the provisional license. In other words, it would award the spectrum licence after the winner has paid the remaining $135 million within 14 business days.
The licensing objectives which the NCC said it has achieved albeit with the early ending of the exercise includes, efficiency in allocating the spectrum to those who value it most in a transparent way which tallies with international standards.
Stephen Bello, NCC Executive Commissioner, Engineering Standards, had earlier disclosed that the licensing objectives were to satisfy the demands by operators which would be in the interest of Nigerian customers. It would also allow for the development of down linkage industries and content provision services.
The Source also learnt that the four 10MHZ frequencies in the 2GHZ band which were won by the bidders include Block A, 1920-1930MHZ paired with 2110-2120MHZ; Block B, 1930-1940MHZ paired with 2120-2130MHZ; Block C, 1940-1950 MHZ paired with 2130-2140MHZ; and Block D, 1950-1960MHZ paired with 2140-2150MHZ.
Remarkably, all the successful bidders have 12 months to roll-out the service, while the tenure of license has been set at 15 years, although it is however renewable.
The 3G, according to the International Telecommunications Union (ITU), is “an enhanced telecommunications service with capability for seamless transmission and reception of high quality sound, data and picture message by fixed fast moving subscribers.” Bello explained that the 3G services were expected to meet certain minimum technical performance specifications such as 2MBPS for indoor/low range outdoor usage and low speed subscribers at speeds no more than 10km/hr, 384KBPD for fast moving subscribers at speeds up to 120km/hr; and 144KBPS for speeds up to 500Km/hr.
The spectrum offers such services as multi-media services – Hi-Fi music, DVD-quality video digital television. There is also access to video-on-demand, locations-based services/GPS, e-commerce/e-mail services, video streaming and high-end games.
The Source’s findings reveal that a major part of the 3G spectrum, 1900-1910 TDD paired with 1960-1980 MHZ had been assigned by the NCC to some Private Telecommunication Operators (PTO’s) since 1996.
According to Bello, out of the available 60MHZ FDD of the 3G spectrum, 20MHZ had been assigned, leaving the 40MHZ FDD that will be allocated after the four successful bidders paid up their $150million.
The FDD40MHZ is available in all the states of the federation, also the TDD 20MHZ. The TDD 5MHZ is available in all the states except Lagos, Bayelsa and Jigawa States, while satellite (GMPC) 20MHZ is available in all the states.
In the United Kingdom and other European Countries, experience shows that there was requirement at the auctioning of the 3G spectrum that operators would require a minimum of 15MHZ FDD and 5MHZ TDD spectrum to qualify to operate it (3G). This was countered by Ralph Udeogu, country Manager, Motorola and another unidentified Ericson engineer who said that 10MHZ FDD is enough for use by an operator in deploying 3G services, while 5MHZ TDD would be good enough cushion for same operator.
The Source however, learnt that the earlier plan by the NCC to auction the spectrum met with a lot of opposition and criticism. For instance, Mohammed Jameel, Chief Operating Officer, Globacom, had argued that the big telecommunication operators deserved granting the licence free of charge, especially considering their huge investments in their networks in upgrading them from 2G-2.5G to 2.75G.
Adebayo Ligali, Celtel’s Chief Executive Officer, had on his part argued that the auctioning of the 3G spectrum would be deterimental to its development in the country. This, he said, is because it would raise its costs and invariably increase the cost of providing the services. These arguements are in line with the advice to the Indian government not to auction the 3G by the Universal Mobile Telecommunication Forum recently. This is because it would add to the burden of initial investors as can be seen in the case of Germany, Italy, Netherlands and United Kingdom.
Apart from the above, France, Japan and South Korea also operate 3G technology. France had to charge investors a reasonable entry fee to encourage them and they were later asked to pay a yearly fee based on 3G usage. But Japan and South Korea were quick to adopt the 3G because their governments priotised technological infrastructure development which reduced spectrum license fees.
Meanwhile, The Source’s findings reveal that most handsets in the country are not 3G compliant, and these phones are very expensive which may slow down the growth of the network. But 12 leading mobile operators in six continents, including Cingular Wireless, Globe Telecom, Hutitalia, Telefonica, Telenor, T-Mobile and Vodafone, are spearheading the GSM Associations “3G for All” campaign, to make their services accessible to a much wider user base.