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Opinions of Tuesday, 1 December 2015

Columnist: Maximus Ametorgoh

The battle for spectrum 800MHz blocks

Recently, the technology industry in Ghana has been witnessing a battle for the two blocks of spectrum 800MHz, which became available as a result of the migration of television from analogue to digital channels as required of every member-country of International Telecommunications Union (ITU), by way of international convention.

This is to harmonise the transmission and reception of high quality digital content so the freed frequency can be re-farmed for deploying broadband services.

With the upsurge in growth of the industry in recent years by way of the increasing demand for data services and voice services at 120 per cent saturation, there is the urgent need to prepare for the next dimension of data revolution.

This requires advanced, available and affordable data connection so consumers of telecom services can share contents, communicate, do business and build relationships online. It requires the deployment of a higher generation of broadband connection.

Local content and the 4G license In answer to this obvious transition from saturated voice services to growing data demands, the National Communications Authority (NCA) of Ghana thought it wise to auction the 4G Long Term Evolution (LTE) licences three years ago to meet the demands for faster data connection on new generation mobile devices, laptops or desktops for consumers to enjoy the great experience of faster speed.

However, the NCA reserved the 4G LTE license for only wholly-owned Ghanaian companies using the local content policy; which prevented the existing telecom companies from acquiring the same license.

The license was offered at cheaper price of US$6 million than the previous generation of broadband services: 2G and 3G offered at about US$25 million and about US$30 million respectively. The local companies who were given Broadband Wireless Access (BWA) license to deploy 4G LTE are Surfline Communications, Goldkey, and Blu Telecoms.

The existing telecoms with 2G and 3G license were able to deploy the technology across 170 districts within five years as required by the National Communication Authority. MTN Ghana, for example, was able to deploy to all the districts before the January 2014 deadline.

Unfortunately, the 4G licensee’s, which were given the privilege of exclusivity through the local content policy, were not able to deploy the technology to 77 districts of Ghana, after three years of being awarded the BWA license.

It is obvious that it is the consumer in Ghana who is being denied the opportunity to access faster, reliable and affordable connection.

Spectrum is a channel for content broadcasting It is important to note that every telecom company needs a spectrum to deploy their data and voice services. Having a telecom license is not enough. Just like radio station, you need the license to give you the legal right to operate in Ghana but you need a frequency or channel to broadcast your contents to your target audience.

Vodafone, Tigo, Expresso, Glo and MTN Ghana have spectrums through which they broadcast their data and voice services to consumers in Ghana. NCA have assigned various spectrums for different services: mobile phones are allocated spectrums in 800, 900, 1800, 2100 and 2690MHz bands. Frequency band of 800 and 1800MHz are used for 2G services, 2100 for 3G and 2500 – 2690 for MHz for BWAs.

For that matter, the ICT Chamber cannot demand that foreign companies must not own a spectrum in Ghana if they already have spectrums through which they broadcast their services, by law and policy.

The battle The NCA will action the spectrum from December 3-9, 2015 and the four applicants are Surfline Communications, MTN Ghana, Goldkey Telecoms and Migson Communications. There is battle for this spectrum because it is cheaper deploying broadband services on it than the 2600MHz one.

As a result, the ICT Chamber is demanding of the NCA to activate their local content policy for 800MHz spectrum so that only wholly Ghanaian-owned applicants will be given the spectrum. They strongly believe that Ghanaian owned companies should be given the frequency since the multinationals will not use it for the benefit of the ordinary Ghanaian in case of emergencies or ‘social requests’, according to the CEO at recently-held press conference.

Unfortunately, this demand has no merit since their members have not proven to be able to meet the deadlines set for them to deploy even the 4G services.

Additionally, the existing telecom companies have shown by verifiable evidences of the fulfilment of their tax obligations, very high percentage of Ghanaian employees, huge investments in various sectors of the economy, volume of corporate social responsibility investments, and the indirect impact of their years of capital investment, that they have contributed to national and industry development.

Why the consumer must be the winner As an industry observer and value-added service provider in the app development and digital marketing space, the consumer must be the ultimate winner in this battle for the two blocks of the spectrum 800MHz.

The NCA must put the benefits majority of the consumers will enjoy to select the winner during the auction of the spectrum. When the consumer wins, application and software developers will be able to develop locally-relevant apps and scale to more consumers nationwide with faster and available internet connection.

This means the government will earn more in tax revenues, businesses will go the digital way, content developers will have larger market segment, and consumers can connect better and faster, more affordably.