Ross Bateson is special adviser on government at GSMA; his projects have included defining use of the Digital Dividend with the mobile and broadcasting community in Russia, Eastern Europe and the CIS, and coordinating political engagement on the GSMA's Mobile Broadband project in Europe, Africa and the Middle East. Prior to the GSMA Ross worked at telecoms consultancy access partnership where he served as a director charged with government affairs. He was at the just concluded NigeriaCom and spoke to chike Onwuegbuchi on industry issues
Sorting out Nigeria Spectrum Licensing
The important issue with allocating spectrum for mobile broadband is to make sure that it is done on a harmonized basis. There is no point in having one piece of spectrum made available for mobile broadband in Nigeria, it is totally different from the rest of the world. That will make mobile equipment very expensive. It is important that manufacturers of equipment can reach economies of scale and drastically lower the cost of both the devices that consumers use with their mobile phones and the base stations on the part of the network as well. Regulators really need to allocate harmonized spectrum and that is organized and decided by a United Nations agency, the International Telecommunications Union (ITU). A lot of international discussions at the ITU resulted in the production of harmonized spectrum bands. The next important issue is for harmonized spectrum bands to become available, they are not currently available in Nigeria. Another very important is the 2.5 GHZ band, it is being used across the world and it will be used to roll out high speed mobile broadband.
The 2.5 GHZ band is very important; it is quite a high frequency, so it does not reach very long distance. Remember, a long wave radio signal travels faster than a short wave radio, so the higher frequencies do not travel the same distance across large areas of the country but they are very good in providing high capacity networks in urban areas.
The Nigerian government needs to come to a conclusion on replanning the 2.5GHZ band. I believe that the NCC has made very good progress, in doing so the discussions between the NCC and the NBC are really continuing and I look forward to the new executive vice chairman, Eugene Juwah, achieving success on that issue. I think it is going to be at the top of the things to do and that will ensure that mobile broadband is rolled out quickly and cost effective in Nigeria.
Ensuring Lower Cost of Mobile Broadband Access Equipment
There are two important things I think you need to look at. The first is ensuring that in the future, the spectrum used is harmonized. That radically reduces the cost of the handset and subscribers are very sensitive to the cost of handsets. Just lowering the cost of the handset by a few per cent can dramatically increase the take up of its usage in any particular market. Spectrum in Nigeria must be harmonized so that an equipment manufacturer can make one unit and sell it across the whole of Europe and the whole of Africa in large numbers, thus realizing economies of scale.
Secondly, the GSMA has put in place a number of initiatives to look at finding cheaper 3G phones. In the last few years, we have had several initiatives in that regard trying to award prizes to high quality but nevertheless lower cost 3G phones and that pulls the prices of some of the most simple 3G phones down to $30 or $40 and they are much more affordable than it had been seen in the past.
Digital Mobile Community Initiative
The GSMA has a huge global campaign on digital dividends. We believe that is one of the most important things to turn the mobile market over in the next few years. The digital dividend is a concept of releasing some of the frequencies that would be made available once analogue TV is switched off and the digital TV is switched on. Digital TV is much more efficient so, it will produce many times as many channels using its significant spectrum at that quarter. The digital dividend allocates this old bulk of frequencies for mobile broadband use and it is significant because the frequencies are lower than most frequently available for mobile broadband.
This means that the signals travels further, the operators do not need to put many base stations on their networks, and the network is much cheaper to offer services. That in turn means that, people in countries where network operators have to cover large geographical areas can receive mobile broadband at lower prices. This is what the GSMA campaign has run for four years now all over the world.
It was initially concentrated in Russia, because of an existing legacy allocation that was used by the Russian military, making it an important country to come to an agreement with. We did a lot of work with the Russian government and with the Russian military in trying to free up the spectrum.
The agreement in principal has now been made in Russia and that is because of Russia’s huge borders. It means that a lot of countries bordering Russia can also use the spectrum.
Digital switch over is just taking off in Africa and we have to make sure that we give support to African governments in order to put in place the tools they need, to come on this spectrum. That very much includes Nigeria; it is a vital market for us and a very important one.
Nigeria and the digital dividend is a difficult situation. The radius of the technical band spectrum in Africa and Europe lies between 790 and 862 MHZ, there is a CDMA allocation in that band. That makes Nigeria’s position rather difficult in allocating the spectrum because you cannot allocate clean contributory chunks in the same way as other countries in Europe or Africa might. We have begun discussions with a number of countries having similar situation and it is just in two parts. Firstly, where the CDMA operators are running very slightly used or the allocation is not used for more than a few base stations, we suggest being very straight on the use it or loose it law to the CDMA operator.
The other option is for regulators to look at allocating a lower band. In the whole of the Americas, the digital dividend says the lower piece of spectrum is between 698 and 886 MHZ and that is free in Nigeria. That will be a very good option for Nigeria.
Submarine Cables in Fast Tracking Mobile Broadband
The submarine cable issue is vital, especially the good position that Nigeria is now in, in having competition between submarine cables. That capacity provides very important backhaul capacity for mobile operators and they are able to choose which submarine operator to use, meaning that they can expect competitive prices. It will become of crucial importance when mobile broadband takes off. There are around 800,000 subscribers I think, using High Speed Packet Access (HSPA) and mobile broadband technology in Nigeria at the moment. We expect that to multiply over a magnitude of 10 times in the very near future. That would need a lot of capacity to cover the backhaul issue but we could carry the signal from the mobile phone tower into the internet at large and the submarine cable will be tightly important as mobile broadband takes off.
Changes in Technology
The GSM family consist a number of different technologies to fit in together and logically follow one another as the network progresses, from GSM to 3G- wide band CDMA as it is called, to the HSPA upgrade– allowing for higher data speed to HSPA+, which is being rolled out in Africa today, to LTE which started being rolled out in Europe a year ago and now there are several networks planned in Africa. These are logical follow-on and products that fit in together are entirely compatible with one another. Operators can move at a very obvious development offering to progress as their networks progress. Wimax is a different technology, it is not compatible with the products currently being offered by the mobile operators, and so, where people have exhausted the use of Wimax, they have to come in, in building an entirely new network. This has proved very difficult for the Wimax to come across and has led to Wimax being considered today in 2010 as a niche technology. It is a very good technology but it will never be a mass market technology like HSPA and LTE. Wimax has really suffered because it is not grand fathered with the previous technology and that has been a problem. We are saying a lot of operators investing in HSPA and LTE networks are continuing with the niche product but there is no major operator. The Russian operator moved out of the Wimax space to favour LTE. Earlier this year, there were big hopes for Wimax but they have not turned out. American Wimax operators have commenced plans to move to LTE in the medium term.
Moving to Next Level in Telecom Development
There are a number issues in Nigeria that still need to be faced and it is not that the NCC has not done a lot of very good work over the last 10 years. I look forward to the NCC carrying on in Dr. Juwah’s leadership as effectively as Engr. Ndukwe’s leadership. We would like to see some things done better. Access to spectrum for mobile operators has been very slow and in order words, they are not entirely transparent. The globally harmonized bands that we spoke of, the 2.5GHZ are very important and over the next coming months I hope to see strong plans to allocate this spectrum along internationally recognized guidelines-what we call ‘ITU option one’ to allocate spectrum for what we call FTD technologies on the 2.5GHZ band and that would be very important.
There are a number of other issues that need to be faced by the Nigerian government. Ensuring clarity and transparency in regulation would be vital. The NCC has done very well but there are other things we would like them to improve on. The way mobile phones are taxed in Nigeria is at times oppressive to market growth. We have done a lot of studies to show that putting luxury and value added tax on mobile phone usage dampens the growth of mobile phone markets to such an extent that if you removed the luxury taxes, the market would grow so significantly that the total tax allocation would be higher. The government would actually receive more tax because so many people are using mobile phones.
Other issues remain the grey and black market for mobile phone use in Nigeria remains damagingly high. These devices are not approved by the NCC or indeed anyone else, they are devices made extraordinarily cheaply abroad, they cause a lot of interference problems that are not properly tuned into the network and that is a major problem in Nigeria.
The key thing that I would like to see is the allocation of internationally harmonized spectrum for mobile broadband. At least the road map to doing that at present the picture is not clear.
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