Currently, what has happened is that there had been a public hearing by the Nigerian Communications Commission (NCC) on the matter and last week, the commission published a report of the public hearing. In other words, what they did was that everything discussed at the hearing were itemised in the report and they put it on their website. So they are in the decision making process now.
Going by the several oppositions of the spectrum transfer and license, what would you expect NCC to do?
Let me start by saying that the issue of total ownership has been rested. MTN totally owns Visafone and the 800MHz spectrum. The question is whether the 800MHz should be allowed to be used by current MTN subscribers. Let’s not be in doubt about that. MTN already owns Visafone 100 per cent including the spectrum. It is the use of the license that is the issue.
Frankly speaking, I wouldn’t like to second guess the commission. It won’t be fair. But if you ask what I will like to be the preferred outcome? That, I can speak to.
Naturally, what I would like the NCC to do is to give MTN access to the 800MHz, because it is easier to deploy resources and make the investment case. It immediately adds value not just to MTN, but to the country as a whole.
With the 800MHz, how would MTN put it to maximal use?
To understand all that we have been saying around the 800MHz in simple terms is to understand the value of spectrum itself. So, where spectrum is in sub 1GHz, I mean the lower the spectrum bands, the better the propagation capabilities because every spectrum has its limitations. Let me explain it this way, if you have a one kilometre square piece of area and you are deploying spectrum on the 2.1GHz, if you need 10 Base Stations (BTS) to cover that space optimally, with 800MHz spectrum, you will probably need four (BTS). What it means therefore is that you can achieve better coverage; you can reach more people and provide services at a lower cost. So, if MTN has access to the 800MHz, it means that it would be able to invest and ensure that broadband reaches more people in Nigeria. The 2018 broadband penetration target is 30 per cent but only 22 per cent penetration has been achieved at this time. In 2017, broadband penetration grew by only one per cent, which seems to speak to the fact that there may have been a reduction in investments in the sector. If you recall, when NCC put 2.6GHz in the market, which is also broadband spectrum but does not have the propagation capabilities of the 800MHz, MTN was the only firm that invested. This is because the process speaks to MTN broadband strategy going forward. It speaks to the need to cover the country as much as possible and provide services in all areas. Other operators did not invest. To bring another issue to the table, if you remember the whole story around 700MHz, which is also sub-1GHz spectrum, all the adventure into that space was also towards ensuring ensuring availability of spectrum for converged services. The idea being that we know that the future of telecommunications is data. If you ask yourself or look at the way you communicate today, the extent to which the OTT services are used as opposed to the traditional voice services to the much more rich media that you can access or do with communication when you have access to broadband, you will discover that the only way to provide these services is to invest in spectrum which is required to deliver the services. What MTN has tried to do and continues to do is to future- proof itself by watching market developments and trends and then ensure that it is positioned to play in the fast developing telecommunications market.
Now following the 2013 Dominance Determination where MTN and GLO were found jointly dominant in the Wholesale Leased Line & Transmission Capacity Markets, the Commission commissioned a cost study on leased lines which led to the imposition of Price caps on wholesale leased line services. The price cap in essence ensures that no operator can obtain more than a fair return on its leased fibre lines. This intervention further ensures that competition in the leased line and transmission capacity market is in no way lessened as all operators will be in a position to access each other’s fibre at a fair price. It is important to note that MTN shares fibre with anybody that is interested. Incidentally, the organizations that spoke against MTN at the public hearing, lease fibre from us while we in return lease from them. This means that the key factors of production that MTN has more of and can decide not to share, it is sharing it without hassles. Where is the lessening of competition or the control of essential facilities to the detriment of others?
Lastly, it is important to add that NCC most times checks and scrutinizes whatever products MTN is bringing to the market even much more than they do for others. NCC is a strong regulator, which other regulators from Africa and across the world come to study. MTNN will never be allowed to undertake actions that will lessen competition. Not by this NCC. There is therefore no need to shortchange ourselves as a nation when there is somebody ready and willing to make the necessary investment we need.
Is it true that operators are not deploying network facilities in the rural areas any longer?
MTN has not stopped investing and it will not be appropriate for me to speak for others. We shall continue to invest because this is a major market for us. We have invested much more than our competitors as evidenced by the size of our network. We are saying that we need resources such as this spectrum to continue to deliver. Buying Visafone and 2.6GHz was a strategic decision taken to ensure that the capability to invest is there. So, from a rural telephony point of view, we are still investing and we shall continue.
How has the industry faired thus far?
I think it is interesting where the industry is going. Inspite of all the challenges, there is hope. I think people would have to come to the table and deal following NCC’s issuance of the spectrum trading guideline. There should be more consolidation. Resources are fragmented. I think business people should look at that matter to know if the way they are operating today is optimal. This issue of owning 10 per cent of something and 100 per cent of nothing would need to be looked into deeply. I think operators need to come together and see the way they can move forward. Globally, there are mergers and acquisitions. I think it will make sense if we go that way. It won’t be bad if we have just three or four operators. I think it is a conversation that should hold.
NCC is doing everything it should do to stabilize the industry, so I think the industry should support these moves. I also believe that government should declare telecoms infrastructure, Critical National Infrastructure to guard against some security lapses. Telecoms infrastructure should be accorded the right protection. All these networks whether MTN, Airtel, Globacom, 9Mobile and the tier two operators, they are all a single network because they are deeply interwoven. So whatever impacts one, impact others. So, there should be more security for the telecoms sector.
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