NCC Now In Frequency Band Racketeering
Frequency spectrum belonging to the Nigeria Police Force to a private company, Open Skys Ltd,
The Frequency Band 450MHz occupied by the police since 2009 was sold to Open Skys Ltd. without any competitive bid process as provided by the NCC Act 2003, nor consideration for national security.
The police surveillance system has been left in dire straits, as all walkie-talkies recently acquired by the force have been rendered mere toys in the box : they are actually not in use due to the displacement of the police from the Frequency band.
The 450MHZ Frequency is valued at over $50million, but was sold for less than $6million by the executive vice chairman of NCC, Dr Eugene Juwah, on September 26, 2011, to Open Skys Ltd, a company said to be owned mainly by Mr Emeka Offor and his associates; NigComsat Ltd owns 25 per cent of the company’s shares.
Ernest Ndukwe, former executive vice chairman of NCC, attempted a provisional reservation offer for the same spectrum to Open Skys on February 4, 2009, but the deal appeared to have elapsed due to non-payment of stipulated fees within one month.
However, the new deal follows the knowledge that the federal government has deployed the $470million police national security and surveillance system.
If the award of the 450MHZ spectrum to Mr Offor is allowed to sail through, it will block the operations of the voice communication component of the $470million national security network that has mounted cameras all over Abuja and Lagos, a threat to the nation’s security at a time the Boko Haram sect is unleashing terror on the country.
Aside the disruption, the nation is losing over N7billion as Open Skys paid $6million for a facility valued at $50million by experts in the industry.
Experts contend that if government chose to retune the security system to another frequency, the additional loss to government could amount to between $45million and $200million just for the equipment, and about $300million for the new spectrum, if 800MHZ is used. Yet, Mr Offor’s company is said to have paid less than $6million for the whole spectrum( paid in two tranches of N592.4million and N300million on 15/11/2011 and 06/07/2011 respectively, totaling N892.4million).
The sale of this facility is already generating some heat in the Ministry of Communications Technology and the police affairs ministry.
Information obtained revealed that the police affairs ministry wrote Ministry of Communications Technology on September 8, 2011, through a letter Ref: MPA/PSD/PRP/ST/164/I/ for the attention of the EVC of NCC requesting for emergency call service number to activate the newly installed security system; only after then did Mr Offor’s company quickly pay the NCC N592.4million spectrum reservation fee on September 15, 2011; and, almost 20 days later (September 26, 2011) the EVC of NCC Juwah single-handedly, like his predecessor Ndukwe, short-circuited all internal and legally sanctioned processes to assign the 450MHz spectrum to Open Skys Ltd.
As if all these were not enough proof of turning due process on its head, surprisingly, it was claimed that the company was duly licensed – against a clear breach of the law and NCC’s internal processes.
At a meeting chaired by the vice president and attended by the minister of police affairs ,Mr Olubalade, and that of communications technology, Mrs Omoa Johnson, as well as the inspector-general of police, MD Abubakar, EVC of NCC Juwah, and MD of NigComsat Mr AT Rufai, it was noted that the award to Open Skys was irregular and fraudulent.
Questions however surround the minister’s action: she was appointed chair of a technical team that should provide a solution but, instead, she went around the vice-president who appointed her and wrote to the president claiming that the spectrum was “duly licensed” to a “commercial operator” that, as it turned out, did not even have an operating licence of the NCC which should qualify it for the spectrum award. Besides, such licence was issued, as insinuated by the minister, two years before the payment date of Sept 15, 2011, i.e. before the commencement of the security project in 2009. In the same letter to the president, the minister was said to have acknowledged the fact that the police was the occupant of the Frequency prior to its being “re-assigned in accordance with revised Spectrum Policy and National Frequency Plan”.
But to players in the industry, the so-claimed “re-assignment plan, revised Spectrum Policy, and revised National Frequency plan” are not known. The worry is that this claim may have been used to misguide the president, giving him the impression that the taking away of the spectrum from the police was legal.
When asked if the police had been displaced from the 450MHZ band, Mr Tony Ojobo, director of public affairs, NCC, said: “ The federal government has set up a committee that is looking into the matter. It has members from different agencies of government including the Nigerian Communications Commission. Once the committee finishes its work, their report will be made known.”
Efforts to reach the police spokesman for comments was unsuccessful as calls to Mr Frank Mba were not answered and text messages to Mr Iyang, his assistant, were not replied.
The 450MHz spectrum is one of the two Frequency bands also sold by the NCC under questionable circumstances. The other is the lucrative 800MHz digital dividend band, which was sold to Smile Communications Ltd, also with utter disregard for due process. The attraction to the 450MHz spectrum band, is its wider cell reach or broad scope that allows the police to carry out surveillance across the country without hitches. The market value of the 450MHz and the 800MHz was further raised in 2007, when the International Telecommunications Union (ITU), the global telecommunications regulatory body, identified the bands as veritable platforms for International Mobile Telephony (IMT), thereby raising its profile and standardized it for universal telecommunications services.
The NCC also tried withdrawing the same 450MHz Frequency Band from the police for the 3G rural telephony. The NCC is said to have announced that it would auction the facility through competitive bidding in line with the NCC Act 2003, but it never did; instead, the Eugene Juwah-led
management threw the provisions of the NCC Act to the sky and unilaterally sold the 450MHZ to Open Skys Ltd.
Sections 33 and 4 (2)of the Nigerian Communications Commissions Act provides the general principles which must be observed, including transparency, fairness, and non-discrimination in order to promote fair competition and investment in the sector.
However, it calls for worry as the the recent security commitment made by the federal government, in which it procured a CDMA network (GoTa system) for what it called “security communication and
video monitoring” nationwide at a cost of $470million for the Nigeria Police and other security agencies, is compromised – all these are to run on the same 450MHz Band which the NCC has secretly sold. Besides, there is no proof that the police returned the spectrum to NCC before it was sold to Open Skys Ltd.
The sale of the 800MHz spectrum to Smile Communications Ltd is another transaction that is breeding bad blood within the NCC as the Eugene Juwah-led management also sold the facility without any competitive bid process.
Our source explained that the CDMA operators had been using the 850MHz since the late ‘90s. At the time, Nigeria had no allocation from the ITU and the spectrum was not very competitive. Part of the spectrum was allocated administratively to CDMA operations from 1997. In 2007, however, the fortune of the spectrum changed as it was allocated to most countries around the world and identified for IMT, a development that pushed its value sky high. An expert posited that if Etisalat’s 2G GSM license was sold for $400m, and 10MHz of paired 3G license was sold for $150m to each of the four winners and one of the winner later sold its own 10MHz for over $240m, then, surely a 10MHz of a more lucrative 800MHz digital dividend spectrum can easily fetch $300m. In Germany, for example, the revenue from licensing the 800MHz Band was €3.576 billion, that is, for the complete 30MHz. This means that a similar 10MHz secretly sold by Dr Juwah and Engr. Ndukwe to Smile for $17m would fetch €1.192billion in Germany. In Nigeria with a similar population, such 10MHz is almost certain to generate $300million.
The source disclosed that Smile applied for 15MHz of 790-862MHz in 2008, with knowledge of the new fortune of the spectrum. The company applied to be allocated “administratively” (without competitive bidding), but was refused, because NCC initially said the spectrum was not available. However, the NCC curiously changed its position on the spectrum sale and awarded the first leg of the paired spectrum to Smile Communications secretly and without any competitive bidding and also short-circuiting the approval processes on July 1, 2009. This action, LEADERSHIP gathered was to see if any eyebrows would be raised, and when no one contested the secret deal, on 28th November 2011 Dr Juwah, NCC went ahead to sell the second leg of the spectrum, also in secrecy and without competitive process as required by Section 33 and 4(2) of the Communications Act.
According to our source, Smile applied for 10MHz of the 800MHZ Band usable for 4G in 2008 and paid N2.154billion ($13.4m) on February 13, 2009, for it, and got 15MHz for that price. The remaining 5MHz was sold secretly to Smile Communications in November 2011 for a proportionate value of N718.2m ($4.8m). This was at a time when the paired legs of 10MHz (one-third of the total) fetched €1.192billion in Germany.
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