5G Still Far Away - Official Sabotage Upsets The Apple Cart
5G Still Far Away - Official Sabotage Upsets The Apple Cart - Sonny Aragba- Akpore
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5G Still Far Away – How Official Sabotage Upsets The Apple Cart

11 mins read

The hype on Nigeria’s 5G auctions notwithstanding, the big elephant in the room – official corruption – threatens the very fabric of that project: Even MTN, with its seeming headway in deployment, will say this in hushed tones and sign language.

The Nigerian Communications Commission (NCC) has done two major bid rounds – first in December 2021 and later in December 2022 – with three licenses issued so far, but it’s still a long wait for potential subscribers.

The NCC denies that the bid rounds were ill-motivated and schemed to rake up money to finance Federal Government’s consumption-laden budgets and buoy a comatose economy, but the rumour still subsists – that the initial  $547.2 million ($273.6m each)  that was paid by  MTN  Nigeria and Mafab Communications in December 2021 auction had motivated the Nigerian government to quickly push NCC  into another bid round in 2022. Ostensibly, this was a revenue hunt by the Muhammadu Buhari government, even when the NCC had assured it would tarry another two years before initiating another

We are made to believe that the regulator was stampeded if not bullied to immediately initiate another bidding process.

Strange! Of course, the absence of bidder interest and enthusiasm meant that a sole bidder emerged – Airtel was the only company that expressed interest and insisted on paying the reserved price of $273.6m. The NCC was boxed to a corner and, in a face-saving statement, announced Airtel as the winner.

All three licenses – MTN, Mafab and Airtel – raised $820.8m for the Buhari government. But that is just the beginning of the matter: None of the so-called licensees has activated their licence mandate in this regard.

Although MTN has shown good faith in launching its services, PBA is aware of certain obstacles to its desire to provide good services in that regard. One of these is Right of Way issues in parts of the country, including Abuja where the Federal Capital Territory Administration is said to have imposed a huge bill on the operator to settle before it could link base stations for 5G services.

Technically, if MTN with pockets deepened by long years of profitable business in Nigeria is jolted by such bills, other players may be intimidated, a situation that would lead to a long wait for the expected services.

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While MTN and Airtel – two GSM operators that have already established themselves in Nigeria – could be so discouraged by government policies in terms of Right of Way issues that were believed to have been settled since 2013 by the National Economic Council (NEC), the situation may even be more frustrating for the new-comer Mafab Communications.

All of these possibly explain why 5G  could still be far away from reality in Nigeria.

As I wrote here a few weeks ago, “5G project in Nigeria has been laced with so many speeches so much that it could be likened to a mere orchestra.”

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Even as I write today, it’s not clear where the services are being received especially when only MTN appears to be trying to run a race that two licensees began.

A third potential operator, Airtel, was added in December 2022. MTN and a little known portfolio company or a Special Purpose Vehicle (SPV) Mafab Communications Limited won the two available lots in 2021. The auction was done with so much fanfare that made Minister Isa Pantami giggle with thumbs up as if Nigeria had won major prizes in global contests.

It’s also very clear now that 5G is not for rookies, despite the wobbling policies in Nigeria where investors are afraid to take investment decisions. Who will blame them anyway, when “ways and means rule is respected more than any policy?

India started late simply because they wanted to get it right, but not so in Nigeria, where the government, regulator and bidders jumped into the fray without good understanding or knowledge about it.

Now, here we are and very soon, another blame game will start while the expectant and enthusiastic subscribers wait if not endlessly for the potential game changer for broadband connectivity,5G.

Let us take a look at the Indian example:

Indian government set in motion workable policies for its auction; hence, the delay in carrying out its process. It concluded this in August 2022 raising $19 billion paid by three companies including Bharthi Airtel.

The success of the Indian auction is not unconnected to the government putting in place rules for all that must be followed and above all, bidders were comforted to have fate in the system especially a stable economy, unlike Nigeria where there are policy somersaults always hence the fear of investors.

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Take a critical look at the aviation industry for instance where many foreign operators are uncertain about continuing in business here.

India concluded its long-delayed 5G auction, raising almost $19 billion in what proved to be a much more competitive process than anticipated.

Analysts said the seminal 5G auction made spectrum available in an array of spectrum bands – 600MHz, 700MHz, 800MHz, 900MHz, 1.8GHz, 2.1GHz, 2.3GHz, 3.3GHz, and 26GHz –  to the operators for the first time.

As a way to achieve workable results, Indian operators began test runs of the new technology for nearly a year, with Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi) all suggesting they would look to launch 5G services in 2022 as soon as the auction was concluded.

For a long time, however, the extent to which the Indian operators would want to compete in the 5G auction was unclear, with the telcos complaining that the spectrum’s reserve prices were too high. At one point, Airtel had even threatened not to bid for spectrum at all if the price was not lowered.

Ultimately, however, the government agreed to reduce prices by only a small margin but instead introduced various measures to make the operators’ participation more viable. This included giving the operators the option to pay for the spectrum in yearly instalments, surrender the spectrum back to the government after 10 years, and also completely removed spectrum usage charges.

At last, the operators bid for the spectrum with relative intensity, purchasing 71% of the available spectrum.

“We will celebrate ‘Azadi ka Amrit Mahotsav’ [75th Year of Independence Day of India] with a pan India 5G rollout,” said Akash Ambani, Chairman, Reliance Jio. “whose company got the largest spectrum paying over $11 billion and is committed to offering world-class, affordable 5G and 5G-enabled services“

He further boasted that “we will provide services, platforms and solutions that will accelerate India’s digital revolution, especially in crucial sectors like Education, Healthcare, Agriculture, Manufacturing and e-Governance.”

Airtel was the second largest winner, spending $5.45 billion, focussing largely on the 3.3GHz and 26GHz bands. The company also bought spectrum in the 900MHz, 1.8GHz, and 2.1GHz bands and notably ignored the 700MHz band, which it still deemed to be too expensive.

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Cash-strapped Vi purchased $2.37 billion worth of 3.3GHz and 26GHz spectrum for limited deployment in certain circles.

“We have successfully acquired mid-band 5G spectrum (3.3GHz band) in our 17 priority circles and mmWave 5G spectrum (26GHz band) in 16 circles, which will enable us to offer a superior 5G experience to our customers as well as strengthen our enterprise offerings and provide new opportunities for business growth in the emerging 5G era,” explained the company in a statement.

The final bidder in the auction was wireless newcomer Adani Group, backed by billionaire Gautam Adani.

Adani Groups says the spectrum will be used to offer private network services to enterprise customers.

The conclusion of the Indian auction marks a major step for the Indian telecoms industry, one that the government hopes will become the backbone of its booming digital economy.

Elsewhere in Africa, not much uncertainty rules like in Nigeria, especially in terms of policies.

South Africa, Kenya, Uganda and Lesotho have since powered 5G networks based on robust policies in place.

The companies are invariably running their networks based on rules by governments in their countries with understandings of those rules like India.

The Nigerian situation is plagued by multiple regulations laced with multiple taxations and in the process, operators and investors are in a dilemma and worried about the future of their investments.

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Sonny Aragba-Akpore 
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