Nigeria Set to Miss N9.3trn New Spectrum Revenue as Digital Migration Stalls
Digital Migration in Nigeria Fails
According to recent investigations by BusinessDay, Nigeria is on the verge of missing out from the $49bn Digital Dividend service revenue accrual to GDPs of economies in sub-Saharan Africa (SSA) on the completion of the initiative with the uncertainties surrounding the Nigeria’s Digital Migration process.
The International Telecommunications Union (ITU) had set June 17 this year, as deadline for digital migration globally. Digital Broadcasting Migration (DBM) is a process in which broadcasting services offered on traditional analogue technology are replaced with digital based networks over a specific period.
Digital migration will allow television viewers enjoy improved picture and sound quality. It will also enable broadcasters offer several channels of programming in spectrum that previously was only able to transmit a single analogue channel.
Market observers say that the country might not enjoy the economic benefits of digital migration as a series of bottlenecks, including paucity of funds, regulation, unrealistic timelines, and low awareness amongst the populace, seem set to frustrate the initiative.
Experts say Digital Migration will open up new market frontiers for content creators and distributors, mobile applications developers, and device manufacturers. They further say government will lose significant revenue expected to come from spectrum sale, after broadcasters have vacated the spectrum band, if the country fails to meet the switch-over deadline.
Also, they say that if the migration date is not complied with, Sub-Saharan Africa stands to lose 506,000 potential jobs by 2020, according to a recent report by the GSM Association.
Market observers say digital migration will free up requisite frequency spectrum resource that would enable telecommunications companies deploy affordable and efficient broadband services to Nigerians, irrespective of age and status, across the entire length and breadth of country.
The GSMA, a body protecting the interest of operators, says that if the transition process is properly and promptly executed, expectations are that the sale of analogue frequencies no longer used by broadcasters could bring the government over $2bn in revenues.
According to the 2014 GSMA Mobile Economy Report, “the process of licensing frequency bands to mobile operators requires a clear and predictable process to ensure that the benefits of this limited resource can be maximized.”
The report however says that unless this process is managed properly, spectrum can go unsold or could be sold at such a high price that it invariably reduces opportunities for network investment.
“The Digital Dividend must be allowed to bear fruit in Nigeria. Government must speed up the allocation of Digital Dividend spectrum to telecoms services providers,” said Wale Goodluck, corporate services executive at MTN Nigeria, the largest mobile operator by subscriber numbers.
“They must ensure that frequency spectrum is resold thus freeing up a lot of spectrum frequency not in use but held by people and institutions without the requisite capacity to deploy broadband services,” he further added.
Governments’ aloofness towards the entire migration process is worrisome, market watchers say, as the country may not meet the objectives and targets clearly outlined in the National Broadband Plan (PDF) (NBP).
The Federal Government has already set the target of a five-fold increase in broadband internet penetration by 2017. Industry observers further say broadband facilitates electronic commerce, e-education, e-health, e-entertainment and e-governance and promises to improve governance, create new business opportunities and raise the quality and penetration of education.
The telecoms industry in the country is poised for 4G deployment on LTE (Long Term Evolution). This is because mobile operators are looking at LTE as a new revenue generator, as it offers them the capacity, including unrivaled data speeds and throughput, to provide innovative offerings, well beyond mundane voice and data services.
Fourth Generation LTE is the most advanced and most flexible global technological standard for wireless data communications. Osondu Nwokoro, director, regulatory affairs and special projects, Airtel Nigeria, says the telecoms industry is constrained by spectrum unavailability.
“The 700MHz Digital Dividend band and 2.6 GHz which are acclaimed by the ITU as most suitable for LTE deployment in sparsely populated (rural) and densely populated (urban) areas respectively, are not currently available for use, as they are being deployed for broadcast services by the National Broadcasting Commission (NBC)”, Nwokoro added.
However, the National Broadcasting Commission (NBC) has ruled out an extension of digital switchover, stressing that the first phase of the plan started in Lagos, Abuja, Port Harcourt, Kaduna and Kano January 1, 2015. Speaking in an NTA Programme on the Digital Transition recently, Edward Amana, chairman of DigiTeam, said that despite prevailing challenges, the NBC will go ahead to switch over from analogue to digital broadcasting as planned.
We do not have a choice. We have to, because there are so many implications of not switching over.
We will become an island on our own. We cannot get protection from our neighbouring countries who have already gone digital. Apart from that, after the transition, the analogue equipment becomes obsolete. And for you to maintain the equipment it becomes extremely expensive.
“However, we are going to transit in phases. What we are going to do is to take the major cities first and move to the rural areas. We will probably start Abuja, Lagos, Port Harcourt and Kano, Kaduna during phase one. In phase two, we will move to other cities until we go round. As we move from city to city, we can learn from the mistakes and correct ourselves. That way, we will be able to fast-track our transition,” he added.
According to him, the team planned public enlightenment campaigns. He added that if the public fails to appreciate the transition, it might affect the whole process. Also, he said, the obligation of the DigiTeam is to draw up the road map for the transition from analogue to digital broadcasting in Nigeria.
“There are many implications for this, business models, regulatory issues and the people at home who currently have the analogue receivers in their houses,” he further said.
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Information from this post originally appeared on BusinessDay