DSO: Fresh Hurdle as Controversy Trails NBC, Pinnacle Deal


With the recent controversy over the relationship between the National Broadcasting Commission and Pinnacle Communications Limited, Raheem Akingbolu wonders if Nigeria can achieve the full digitalisation of the broadcast industry anytime soon

Nigerians received two positive signals toward achieving switch over from analogue to digital broadcasting (DSO) in their country recently that were well reported in the media. First, while playing host to the Niger’s Minister of Communication, Koubra Abdoulaye, the Minister of Information, Mr. Lai Muhammed dropped the hint that Nigeria would switch over from analogue to digital broadcasting (DSO) in six states across the six geo-political zones within the next one month.

A week after, in what looked like official confirmation of the statement, the chief driver of the process and the Director General of the National Broadcasting Commission, Mallam Is’haq Modibbo Kawu, announced at a press briefing in Lagos that Nigeria would adopt phased implementation, which would begin with six states. Kawu moved a bit further to name the six states that have been chosen to include Enugu in the Southeast; Kaduna in the Northwest; Gombe in the Northeast; Kwara in the North Central; Delta in the South-South and Osun in the Southwest.

The Director General stated that the commission will remain optimistic; adding by the end of the year, at least half of the country would have access to Free Digital Television content. It was cheering news that gladdened the heart of stakeholders. In a country, where the goal post had been shifted for about four times; 2007, 2012, 2015 and 2017, the new development was seen as a positive one.

But few days after, what appeared like a clog surfaced; the unpleasant news about the crisis among major actors at the center of the process hit the street. Specifically, the NBC, and Pinnacle Communications Limited were said to be currently enmeshed in sleazy deals and graft, said to be to the tune of N2.5 billion.

According to THISDAY findings from NBC, Pinnacle Communications and other appointed signal distribution companies, the federal government regulatory agency might have jettisoned fairness and global regulatory best practices in its dealings with the stakeholders, which some observers see as an unfortunate development that could further delay and derail the project. Already, Nigeria has missed two deadlines for switch over and these they say are being rationalised by the commission as normal teething problems whereas billions of tax payers’ money are allegedly being used to fund a private company, which by contractual agreement should be paying the federal government.

Breach of contract

Currently, some of the stakeholders are accusing NBC of giving priority attention to a particular signal distributor at the detriment of others, a situation, they believe, does not augur well for fairness, equity and business competition, thus slowing the pace of development for the digital switchover.
According to them, government had licensed three key national signal distributors, Pinnacle, MTS and Integrated Television Services (ITS) to drive digital signal distribution process across the country and to provide easy access of the digital signals to Nigerians. But the stakeholders are worried that some unseen, but powerful hands in government are trying to favour one over the others, for personal reasons.

Before the announcement of the six states, Abuja and Jos had first been signed on as a testing ground. At the launch of the Abuja switch over, acting President, Prof. Yemi Osinbajo was said to have expressed satisfaction with the facilities Pinnacle Communications Limited installed. Meanwhile, the acting president was said to have been sold a dummy to believe that Pinnacle did not receive any financial assistance whatsoever from government. But investigation revealed that Pinnacle, a private operator, had actually put up the show on the strength of the money it collected from government through the NBC.

Unanswered questions

The question many are asking is why was such huge sum of money given to a private company that bided for the project? The issue is generating controversy because part of the pre-requisite for getting the license was the ability of a private firm to mobilise financial resources to carry out the project, but in this case, it is believed that Pinnacle claimed to have the financial wherewithal as at the time of the bid and hence it won against other bidders. Other companies are now wondering why NBC gave out N2.5 billion to the company and curiously, the information was kept away from the public.

Some stakeholders are also wondering how to reasonably justify the flagrant abuse of office when a regulator, who is expected to be fair to all the players in the industry, especially, licensed operators who bided and agreed to specific terms, turned around to prop -up one at the expense of the other players, and the Ministry of Information and Culture, under whose watch the sleazy deal is being perpetrated seems to be watching without a word.

According to Mr. Toyin Oluwadare, an engineer and content developer, for the NBC to have secretly given out money to one operator and pretended as if nothing had happened is the heights of impunity and corruption. ‘’Up till now the commission has yet to give any explanations for the N2.5 billion given to Pinnacle Communications and stakeholders are begging for answers, particularly for a government who rode to power on the wings of fighting corruption.

‘’Apart from the Abuja switch over which Pinnacle did use the money it got from NBC to executes, the firm is still struggling with the completion of the other sites allocated to it, and as a matter of fact, they are yet to complete the first site,’’ he said.

While the NBC is yet to set appropriate rules and conditions with regards to carriage of licensed TV channels on the infrastructure of the signal carriers, such as carriage rates and geographical coverage areas, as well as the thorny issue of conflicts over areas of operation, since all three Broadcast Signal companies have the same license to operate across the country, analysts wonder why NBC allegedly went ahead to curiously pay Pinnacle Communications, a licensed private operator, the large sum.

It is believed in some quarters that the commission’s decision to pay Pinnacle Communications was based on the mistaken belief that since the other operator was given a grant of N1.7b by the previous management, others should also be paid because Pinnacle had during its licensing bid confirmed its financial capability to roll out operations across the country.

‘’It is rather curious now, how such a company is being paid monies that should otherwise be used to finance the DSO roll out, which once again failed to meet the June 17, 2017 deadline,’’ Oluwadare pointed out.

However, the first broadcast signal distributor though is supposed to operate as an independent company was specifically established to serve as government owned signal distributor given the strategic importance of broadcasting to national security interests, and the funds allocated to it by the former director general, was government’s share of the financial burden needed as take-off grants for signal distributor; and formed part of the larger DSO budget which was vetted and approved by former president, Goodluck Jonathan.
Again, the question has always been how a private company that is a licensee of the NBC is receiving funding from government in the wake of the nation’s persistent failed DSO. As a licensee, it is believed that the operator concerned is supposed to pay NBC license fees and other regulatory charges and certainly not to be paid by government for any reason.

In an interview with THISDAY, Mr. Sunday Anyebe of Ryma Communications wondered what justification can warrant the giving of money to a company that competed in a licensing round and still got its initial N2 billion license fee reduced by the former Director General to N600 million for a 15 year license on grounds that the winner would have significant roll out obligations?
He said; ‘’Why is this same company receiving 2.5 billion from the government, and in secret? How was the sum of N2.5 billion computed, based on and what were the parameters, and for what purpose? What then happens to the other signal distributor MTS, which ostensibly is owned by the entire licensed private and state owned broadcasters under the auspices of the Broadcasting Organisation of Nigeria (BON), currently chaired by Chief John Momoh? Will they also be getting N2.5billion? Most importantly, why is the process a top secret even within the NBC management?’’ he asked.

Brand promise

At the beginning of the process, Pinnacle Communications was said to have made technical and financial undertakings to deploy infrastructure to run DSO and it was upon the basis of those undertakings that it was screened, evaluated and approved to be granted the license as a broadcast signal distributor in the first place!

Having being paid N2.5billion by government, many stakeholders believe that Pinnacle has made fraudulent and false undertakings in its license application process and that the licensee has evidently defrauded the Nigerian government and people twice: first getting an unmerited discounted license fee, and now being extended huge amount of money with no justification or merit.
As things are, the public is in limbo about the process so far. How many boxes have been switched on? What is the extent of the digital penetration? What are the number of new channels and services now available to viewers? How much is a set top box sold? And if there are consumer complaints, where or to whom are they to be addressed? Is there a DSO Help Line?

Again, the NBC’s DG recently announced that the commission had spent a whopping $26m on set top boxes. It was however not able to say how many of these boxes have been activated, where and when. No current estimate on the actual digital penetration even in the cities where the Commission launched its “pilot” DSO project and how many boxes have been sold and activated so far? Are boxes still being imported or now manufactured locally? What is the ratio of foreign and local boxes? For how much are they sold? These and many more questions are currently being asked by stakeholders.

As things stand, the payment made to the said company and the undercurrent are seen by some as an opportunity to line their pockets rather than deliver the promise of digital to Nigerians. However, some of the issues may require urgent attention before the commission moves on with the digital migration process.