Alleged N34b NBC, MTN spectrum deal raises dust
THERE are indications that the National Broadcasting Commission (NBC) might have sold the spectrum frequency in the 700MHz bands to MTN Nigeria for about N34 billion in a deal that is yet to be made public even as industry leader, MTN says its transaction is transparent.
The 700MHz spectrum is for broadcast, but essential for telecommunications operators, especially in the provision of broadband wireless services.
The advantage of the 700MHz spectrum is that the signals travel longer distances than the higher frequencies used by many other wireless systems. Networks that use the spectrum require fewer cell towers to reach the same geographic area.
Also, like television broadcasting, signals in this spectrum penetrate walls easily. It was learnt that as the amount of revenue made from making phone calls continue to decline globally, the upsurge in data application by subscribers provides telecommunication operators with a new opportunity to boost revenue.
But data (video and audio streams, among others) eat good chunk of spectrum a lot more than voice. This might be the reason demand for spectrum seems to have assumed another dimension among operators.
A source, who was privy to the deal, told The Guardian that the N34 billion was paid into NBC’s account domiciled in a bank, whose chairman, was said to be dealing with MTN on the same spectrum, which he has been struggling to acquire for his company.
The source disclosed that the parties involved in the deal may have also signed an agreement that will make MTN to take over Visafone, thereby acquiring another carrier that has millions of users in a market that has declared the telecommunications firm a dominant player.
There had been rumour of acquisition of Visafone by MTN, although the management of the telecommunications firm with South African root has been silent about the deal.
A top management staff of Visafone, who spoke on condition of anonymity, however confided in The Guardian that MTN has long concluded the deal and successfully acquired Visafone, the only surviving Code Division Multiple Access (CDMA) operator in the country. From findings, NBC does not have direct authority to issue spectrum to telephone carriers.
By law, NBC is the regulator for the broadcasting companies only. The only authority mandated under the Nigerian constitution to allocate spectrum to telephone carriers is the Nigerian Communications Commission (NCC), which currently claims not to be aware of the N34 billion spectrum deal between NBC and MTN.
The NBC is the body charged with regulating the broadcast industry, setting broadcast standards and upholding equity and fairness in broadcasting.
NBC is also responsible for assigning broadcast frequencies it receives from the National Frequency Management Board to private and public radio and TV stations.
The National Broadcasting Commission Decree 1992 (as amended) sets out the powers of NBC. Being a statutory body, all actions undertaken by NBC have to be in accordance with the decree.
Pursuant to the provisions of sections 2 and 9 of the decree, NBC’s powers of licensing are limited to entities undertaking broadcasting activities and do not extend to any other entity. But in its reaction to the alleged back door transaction, MTN’s Corporate Services Executive, Akinwale Goodluck, who neither denied nor confirmed that the telecommunications firm acquired the frequency, simply stated: “MTN does not do ‘back-door’ deals.
The company, in its transactions, employs the highest ethical and transparency standards. Its actions are the subject of necessary approvals and due process.
MTN, in pursuit of its objectives, continues to consider all legitimate opportunities.” When The Guardian approached the NBC for its reaction, the Director-General, Emeka Mba, said the corporation actually got permission from the right authority before embarking on the transactions.
Mba, who said the 700MHz spectrum is for broadcast, informed that the NBC doesn’t advertise and that it was not an open auction, but was given to the highest bidder after due process was taken. “700MHz is not telecoms spectrum! It’s still broadcast spectrum until after Digital Switch Over (DSO).
Approval was sought and received to raise revenue to pursue DSO by licensing commercially a portion of the digital dividend spectrum for converged broadcast services use,” he said.
The NBC boss had told The Guardian that the corporation would send a full and authorised statement to give further insight into the deal, but as at press time, it has not come from NBC. When the NCC was contacted, the Director of Public Affairs, Tony Ojobo, in a text message, simply said: “I don’t have any information on that. May be you should confirm from MTN.”
Other telecoms operators had in several interviews with journalists, expressed their readiness to get the 700MHz frequency. For instance, the Chief Executive Officer of Airtel Nigeria, Segun Ogunsanya, said with 700MHz allocation, the possibilities are endless.
Ogunsanya, who said Airtel was actually waiting for the spectrum band to expand its service reach, noted that with the allocation, GSM operators can significantly increase their capacity, improve quality, and also reduce capital expenditure, and the savings from operating costs will translate to affordable telecommunications services. “Without a doubt, the release of more spectrums can potentially impact positively on Nigeria’s GDP and may lead to the creation of more jobs.
The 700MHz spectrum allocation can lead to duplex arrangement of 45MHz uplink (going leg) and 45MHz downlink (return leg) with a minimal duplex spacing of 10MHz.
The 45MHz can provide 15MHz assignments into three times. “There should be effective coordination between the Nigerian Communications Commission, National Broadcasting Commission and National Frequency Management Council to ensure that the 700MHz spectrum band is cleared and released for telecoms services as recommended by the International Telecommunications Union (ITU).”