Spectrum Trading: Stakeholders Call for Subtle Regulation

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Emma Okonji

Having achieved international best practice in the telecoms sector, through a robust telecoms regulation, industry stakeholders have called for the introduction of secondary spectrum trading in the telecoms industry.

The stakeholders also called on the Nigerian Communications Commission (NCC) to avoid over regulating the process, in order to give room for flexibility and unrestricted growth of the telecoms sector.

They made the call in Lagos on Tuesday, at an annual consultative forum on Engineering and Emerging Technologies, with the theme: ‘Framework For Spectrum Trading in Nigeria’, organised by the NCC.
In his opening remarks, the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, who was represented by one of the directors at NCC, Mrs. Funlola Akiode, said the forum was organised to enable NCC sample stakeholders’ opinion that would help the commission in drafting a framework for the introduction of secondary spectrum trading in the telecoms industry.

Although spectrum trading is not commonly practiced in Africa, the NCC decided to introduce it, in order to provide opportunities for some operators to trade their spectrum licences, which they had acquired in the past, but were unable to deploy the licences in full for some reasons, which are mostly linked with the inability of the operator to raise enough capital for service rollout, after spending so much money to acquire the spectrum.

Although they agreed with NCC on the planned introduction of secondary spectrum trading, they however warned that NCC must liberalise its regulation, and come up with a policy framework that would enable operators sell and buy spectrum at will, but not without some guided principles from NCC, for a smooth transaction process.

The Chief Executive Officer of Open Media and former Executive Vice Chairman of NCC, Ernest Ndukwe, commended the management of NCC for the initiative, which he said, would not only boost competition and improve telecoms service offerings, but would also encourage the use of spectrum and discourage spectrum hoarding in the industry.

Senior Director, Spectrum Policy Engagement at GSMA, Mr. Fraser Graham, who presented a paper on Global Trend/Spectrum Trading in Developing Economies, described spectrum trading as the deliberate process of selling and buying spectrum licences among telecoms operators. He said although spectrum trading comes with some forms of regulation, but advised that NCC should make such regulation simple and attractive enough to encourage spectrum trading among willing sellers and willing buyers among telecoms operators.

Presenting the advantages of spectrum trading, Graham said it would help promote market competition, create opportunities for fresh investments from foreign and local investors, drive innovation and enhance fast business growth among others.

He gave instances of countries like US, UK, India and Australia that have successfully implemented it, while pointing out some of the challenges they encountered in the implementation process, which he said, Nigeria must learn from in order to avoid the pitfalls.

The former Director at Ofcom, the UK telecoms regulatory body, Mr. Sama Nwana, who also presented a paper on ‘Spectrum Markets: Liberation, Trading and Pricing’, listed there ways to manage spectrum licences, which include: Command and Control; Market Led and Licence Exemption. He gave the advantages and disadvantages of the three models and asked NCC to decide on the model that best suits its regulatory framework, or better still, apply a combination of methods to achieve flexible regulatory framework that would not stifle telecoms growth.

President, Association of Telecoms Companies of Nigeria (ATCON), Mr. Olusola Teniola, who supported the planned introduction of secondary spectrum trading, said it would help operators to trade off spectrum that are not in use and invest the proceeds in network expansion.

According to Danbatta, the Commission intends to review the spectrum management policy and develop additional strategies to meet the increasing demand for spectrum by the operators due to expansion of access to mobile services and improvement of quality services delivered by operators.

“The objectives of the Commission’s Spectrum Management Policy depends on the market circumstances, how the available spectrum is currently used, the competitiveness of the market and the risk to investment and service quality as the market grows,” Danbatta said.