FG’s revenue focus on spectrum pushing up cost of internet – ALTON

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has said the federal government’s target of generating revenue through the sales of spectrum is making internet service more expensive in Nigeria.

The umbrella body of mobile operators stated this at a meeting with the Minister of Communications and Digital Economy, Dr. Bosun Tijani.

At the meeting convened at the instance of the Minister to address issues confronting the telecom sector, the Chairman of ALTON, Engr. Gbenga Adebayo said rather than viewing the spectrum through the lens of a natural resource to be utilized for the sole purpose of revenue generation, the government should see it as an asset to be harnessed for national, socio-economic, and human development.

The telecom spectrum, in simple terms, is like an invisible highway where your phone and other wireless devices travel to connect with the network. Mobile service providers buy parts of this spectrum which comes in different frequencies, from the government to ensure a strong connection for your calls, texts, and data.

Last year, the Nigeria Communication Commission (NCC) said that the government would generate over N500 billion in the 2023 fiscal year through the 5G spectrum.

This was after the Commission said it had remitted N195 billion to the government coffers as revenue from spectrum in Q1 2022.

Expensive broadband

While noting that spectrum is one of the pillars upon which the Nigerian National Broadband Plan (NNBP 2020 – 2025) stands, the ALTON Chairman said the availability and affordability of spectrum is integral to support the digital economy aspirations of the federal government.

• “Prioritizing spectrum for its money-generating abilities alone can negatively impact the welfare of the citizenry as expensive spectrum prices have been shown to result in more expensive retail broadband prices thereby impairing broadband adoption objectives,” Adebayo stated.

Ongoing price review

Adebayo also expressed concern over an ongoing review of the Frequency Pricing Regulations by the NCC, which he feared would result in an astronomical upward review of frequency spectrum prices.

• “This, we believe, will further disincentivize operators from investing in the needed expansion and upgrade of mobile networks via the acquisition of spectrum resources.
• “Also, the available spectrum offerings are insufficient given the constantly evolving range of telecommunications services. This is especially true of the mid-band range which is optimal for next-generation communications due to its ability to deliver on both coverage and capacity. The GSMA has recommended that policymakers should license spectrum to mobile operators in harmonized bands, such as 3.5GHz, 4.8GHz, and 6GHz, to meet the ITU’s requirements by 2030 and maximize the full potential of 5G,” he said.

The ALTON Chairman also called for a review of the Spectrum management process to ensure optimal use of the scarce resource for the benefit of the nation.

According to him, the assignment process, actual use of the frequency, and the secondary trade of spectrum all contribute to the effective and efficient management of the spectrum resource.

Minister’s response

In his response to the issue of spectrum and several other issues affecting the telecommunications industry including right-of-way charges, and vandalization of telecom equipment, among others, the Minister said he plans to form two independent think tank groups and implored ALTON to work with him to achieve his goal. He said the think tank groups would work towards ensuring that the government does not kill the private sector and the private sector does not undermine the government.