DECEMBER 26, 2016 – With anticipated new investments to deepen broadband Infrastructure in the next few months, the Nigerian telecommunications sector which already has about $68 billion total investments so far, is set to add N799 billion (about $2.6 billion) through telecoms licences and capital investments in the year 2017.
According to LEADERSHIP, the Nigerian Communications Commission (NCC) targets N189 billion ($619.6 million) earning from spectrum licences in the course of the New Year thus boosting the sector’s contribution to the Gross Domestic Product (GDP). NCC also expects to earn N39.04 billion ($128 million) from the remaining eight lots of the 2.6GHz spectrum licence.
It is projected that the telecoms regulator would also earn about N50 billion from the remaining Broadband Infrastructure Company (Infraco) Licences that will be issued this year in the remaining five geopolitical zones. Also, NCC is working on auctioning the 70/80 GHz spectrum bands.
There are also the700/800MHz bands starting from July 17, 2017 as television broadcasting stations move from analogue to digital broadcasting, relinquishing the frequencies from the Digital Switch Over (DSO) thus creating Digital Dividend Spectrum in the 700MHz/800MHz bands which would be sold to telecoms companies. NCC should bring a minimum of N100 billion altogether.
Sources also revealed that on the other hand, telecoms operators are expected to spend N610 billion ($2 billion on capital expenditure (Capex) to rollout more 2G and 3G base stations, fibre-backhaul their base stations to 4G, expand fibre optic cables to unserved and underserved areas as well as ensure densification of the network for optimum quality services.
The NCC has been beckoning on local and foreign telecommunications investors to avail themselves of the opportunities in the various spectrum licences auctions that would take place in 2017. The success of the exercises would help Nigeria surpass the 30 per cent broadband target set in the National Broadband Plan 2013-2018.
Already, the ITU-UNESCO Broadband Commission for Sustainable Development’s September 2016 report indicates that Nigeria’s broadband penetration has reached 20.95 per cent. According to NCC, many operators have been demanding for the release of more spectrum, noting it would provide opportunities for them to rollout more services on a larger scale.
Analysis shows that the Nigerian telecoms sector has recorded very significant growth in the last 15 years from 500,000 active lines to the current 153.5 million with teledensity presently at 107 per cent, while internet connectivity has also moved from 50,000 in the year 2001 to 97 million at the moment.
According to the executive vice chairman of NCC, Professor Umar Danbatta, the regulator is working on deepening broadband penetration.
“We have already outlined our plans, which include the licensing of fibre infrastructure providers in the remaining five geopolitical zones of South West, South East, South South, North West, and North East.
“Two companies are already licensed for North Central and Lagos. We have successfully sold some slots of frequencies in the 2.6GHz spectrum band, and will continue to commit efforts towards efficient management of resources to achieve the various targets expanding the frontiers of broadband and improving the telecom sector,” he said.
Recall that two years ago, NCC issued InfraCo licences to Main One Cable Company and IHS Limited to build broadband infrastructure in Lagos and North Central zones. Danbatta has articulated a regulatory framework to enable strategic and systematic licensing and deployment of broadband infrastructure across Nigeria. He has also set up a Broadband Implementation Monitoring Committee within the NCC to give proper assessment and regular appraisals of the plans.
It was also gathered that the NCC intends to sell the remaining 40MHz in the 2.6GHz band. About eight lots are remaining with reserve price for one lot of 2X 5MHz valued at $16 million only. This will fetch $128 million minimum. Already, MTN has acquired six lots for $96 million in June this year.
The International Telecommunications Union (ITU) set aside spectrum in the 2.6GHz band for the provision of Advanced Wireless Broadband Services (AWS) for national regulators. NCC will issue winners of the 2.6GHz spectrum with a 10 year National Spectrum licence on a state by state basis and the Federal Capital Territory.
According to NCC, the 2.6GHz spectrum is a significant trigger for a broadband revolution that will unlock benefits such as greater coverage, access, affordability and innovation, with the customer at the centre of these gains. The band guarantees superior performance for wireless networks especially 4G LTE services.
Mr. Ferdi Moolman, CEO of MTN Nigeria said the 2.6GHz acquisition has set the stage for the roll-out of 4G LTE broadband internet services across the country, starting in the major cities of Lagos and Abuja.
Although Nigeria is one of 28 African countries that currently offer 4G/LTE services, the rate of penetration is restricted to a few major cities.
70/80 GHz Band Licence
The 70/80 GHz spectrum band licencing would address growing demand by operators for data-centric, high speed and high capacity networks that consumers are demanding to meet their bandwidth needs. The band popularly called E-Band known for high capacity point-to-point communications is yet to be fully explored and exploited in Nigeria.
NCC is adopting a Light Licensing Model for Nigeria which would cost each licensee N14, 400 ($72) per hop per annum in Nigeria. The 70/80GHz spectrum is a replica of fibre in the air, assisting NCC drive the national Broadband Wireless Access (BWA) initiative.
According to Director, Spectrum Administration and Control, Engr. Austin Nwaulune, the National Frequency Management Council (NFMC) has allocated 71-74 GHz/81-84 GHz spectrum bands to NCC. The regulator would make available a total of 3GHz out of the available 5GHz bandwidth Frequency Division Duplex (FDD).
Each band can cover an average distance of 1.5km and spanning to four kilometres or more. By the proposed plan, there is 2.875GHz bandwidth in each of the uplink and the downlink, as well as guard band of 125 MHz at both ends of the bands. The spectrum would aid mobile and small cell backhaul; high-speed point-to-point wireless LAN; broadband Internet Access (last mile).
$2bn capital investments
Ntel owned by NATCOM Telecom and Investments Limited, Smile Communication Nigeria Limited, Globacom, MTN Nigeria, Etisalat Nigeria, Inter C (formerly Intercellular) and Bitflux Communications Limited have all launched Fourth Generation Long Term Evolution (4G LTE) technology on their networks to give subscribers faster speed voice, video and data services.
MTN Nigeria this year budgeted $716 million to expand its network. In 2017, it is expected to devote at least $500 million to capital expenditure as it continues to extend third generation (3G) technology coverage to 90 per cent of Nigeria in 2017 and start a fibre-network rollout in six cities in the country.
It will also continue the fibre backhauling of its base stations to equip it with fourth generation (4G) technology speed.