Nigeria gears up to auction 2.5GHz spectrum

Nigeria is gearing up to auction spectrum in the 2.5GHz band to let operators deploy infrastructure for broadband services, said Ernest Ndukwe, chief executive officer of the Nigeria Communications Commission (NCC), the country's telecommunications regulator.

"It is our intention to issue spectrum licences in that band because that is the band that is earmarked for broadband infrastructure," said Ndukwe in Abuja.

"What is holding us back at the moment is that some of the spectrum is occupied at the moment by some other services that is involved with the [Nigeria] Broadcasting Commission (NBC), and there is a discussion now about freeing the spectrum in [order] to enable us license them, and we have gone quite far, we have received a lot of cooperation from the NBC. We think that very soon when those frequencies get free up, we will be able to offer them to operators that roll out broadband infrastructure," Ndukwe said.

Many operators in Nigeria's competitive telecom market of 50 million subscribers and less than 5 million Internet users are eying the 2.5GHz spectrum band to enable faster rollout of broadband Internet and mobile services in what could tilt the playing field against existing incumbents.

The market is currently dominated by GSM (Global System for Mobile Communications) telecom companies. MTN leads with 16 million subscribers, trailed by Globacom with 15 million and Celtel with 14 million. The rest of the market is shared by a mix of landline and CDMA (Code Division Multiple Access) mobile operators, with the biggest CDMA operator, Starcomms, having 1 million subscribers.

"This spectrum would allow for easy deployment of WIMAX. There is no limit to what you can do with WIMAX," said Lanre Ajayi, CEO of Lagos-based Pinet Informatics and president of Nigeria Internet Group (NIG). "It opens several possibilities within the new generation of technology, the range of LTE - Long Term Evolution technology. You are talking of more extensive and wider deployment of services ranging from mobile voice, mobile video and data at more affordable rates,” Ajayi said. NIG is an all-stakeholders organization, with membership drawn from the public and private sectors, charged with ensuring Internet diffusion in Nigeria.

"The market profile could easily change depending on who deploys first, fast and is more responsive to market needs," said Titi Omo-Ettu, Lagos-based telecom analyst and chief consultant at Telecom Answers Associates. "Market leadership is as much of [a] technology edge as it is of [a] financial edge and management edge."

Nigeria would be taking a cue from other countries in Europe and Asia, where regulatory authorities have issued spectrum for broadband and other services as the industry has standardized on equipment that enables roaming between countries in the same manner that GSM users can roam from country to country.

"The beauty of the entire process is standardization. Same terminal would mean optimized experience for users across different territories, as well as operators deploying network for service," said Bayo Banjo, chief executive officer of Disc Communications, a landline operator in Lagos that is already seeking to explore mobile technology on the 2.5GHz spectrum band.

Nigeria’s WIMAX license holders include Lagos-based Hyperia, one of the country’s oldest Internet service providers, and Monarch Communications. Both providers are licensed to deploy services in more than half of Nigeria’s 36 states including the Federal Capital Territory, Abuja. WIMAX is currently being deployed in the 3.5GHz band, but the rollout has been slow and service pricey.

With the regulator fine-tuning plans for a 2.5GHz spectrum band auction, analysts say the market is entering its next phase of a boom, hinged on WIMAX.