700 MHz Spectrum: A Sale That Went Awry

Editor’s Note: This post was written by Musa Akwanga, a legal practitioner and consumer rights advocate.

A deal that was initially explained as a means to raise cash to enable Nigeria meet the International Telecommunication Union (ITU) deadline for the Digital Switchover (DSO) is beginning to go awry.

In November 2015, the former Director General of the Nigeria Broadcasting Commission (NBC), Mr. Emeka Mba, responding to questions on the controversial N34 billion sale of the 700MHz spectrum to MTN Nigeria, had stated:

When it became obvious government could not spare the money, and in order to avoid missing another deadline, we began to consider other options. Our broadcast frequency, which is to eventually form part of the digital dividend after the DSO, had portions of it lying fallow while our broadcasters are still using part of it. We therefore proposed and got proper permission from government to license part of our spectrum lying fallow and to use the proceeds to finance the DSO…I’m pleased to inform you that we have successfully licensed MTN Nigeria Limited to use part of the 700Mhz to provide digital pay TV broadcasting services. We have thus raised N34 billion, slightly less than our budget.”

Mba further argued that the sale of the 700MHz spectrum to MTN would fund the acquisition of equipment required in the DSO process.

However his justification is flawed on many grounds as the sale in itself, to a large extent, precludes the actualisation of the transfer and reallocation of the spectrum as intended by the ITU.

In spite of the explanation, some industry stakeholders were upset about the sale, insisting that it was not the right of NBC to auction national spectrum which it was supposed to vacate and handover to the telecoms sector, but the prerogative of the Nigerian Communications Commission (NCC). Stakeholders noted that the sale was capable of stifling competition in Nigeria’s telecommunication market as it gave undue advantage to MTN Nigeria and called for an immediate review of the sale of the spectrum.

According to industry watchers, the N34 billion, which the spectrum was sold for, is a paltry amount as its true value is said to be in excess of N200 billion, meaning that Nigeria may have lost over N162 billion because of the gross undervaluing of the spectrum.

The only authority mandated under the Nigerian Constitution to allocate spectrum to telecommunications services providers is the NCC. NBC has no knowledge of the true value of the spectrum to a telco and therefore has no basis upon which to determine a fair price for such a national asset.

Now, NCC’s Executive Vice Chairman, Prof Umar Danbatta has said that NBC should not have sold the country’s 700MHz spectrum to MTN Nigeria because it is a telecommunication spectrum that is very important for broadband deployment.

Speaking at a forum last month, Danbatta stated that NCC would not publicly engage NBC, even though it is under a different ministry, “because we don’t think it is the right approach.”

He further said: “The Frequency Management Council, which is a very important organ of government that has a representation from the Federal Ministry of Science and Technology as well as that of the Communication Technology Ministry, will look into the matter. We intend to avail ourselves of existing mechanism for arbitration and mediation through the Frequency Management Council.”

Nigeria missed the transition to digital broadcasting in June last  year, with the NBC citing lack of fund from the Federal Government as reason for its inability to join the countries that were able to effect the digital switch as stipulated by the International Telecommunications Union (ITU).

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