Ghana’s NCA set to offer voice and data WiMAX licences but with conditions

Ghana’s regulator NCA is consulting on offering spectrum and a licence that will allow those who win them to offer both voice and data. But as you might imagine there’s a number of catches contained in the package. Russell Southwood looks at what’s on offer.

NCA says that it wants to award a total of five spectrum licences for BWA services in the 2,500 MHz-2,690 MHz band. There will be three slots of 30 MHz blocks nationwide for operators using unpaired spectrum and two slots of 2 x 15 MHz blocks for operators using paired spectrum.

Both licences will run for ten years. In addition, there will be an extra paired 2 x 5 MHz and an extra unpaired 15 MHz available to the winners of the five licences. Obviously the spectrum could suit a number of technologies but the most likely is WiMAX.

What is ground-breaking about the licence is that “end users shall be allowed to use their equipment in fixed locations, in a nomadic manner or with a full mobile capability, at their choice.” Furthermore, these licensees do not require to have a separate Internet user licence. The licence also covers the whole of the country.

There’s a non-refundable application fee of US$100,000 with the winning of the five licences being determined through an auction. The minimum reserve price for the auction is US$5 million.

However, the licences is hedged about with conditions. The successful operators have to achieve 60% penetration of each of a set of zones and 100% penetration of district capitals. The zones are groupings of district areas from the highly attractive (Accra Metropolitan) to the much less attractive (Bole in the Northern region). In addition, the operator has to satisfy a set of quality of service metrics that will be outlined in the licence.

So five years later, half way into their licence period, if they have satisfied all these conditions, luck operators will then be able to pay a one-time fee of US$1 million and be able to offer voice services. However, the licence does not entitle the operator to an international gateway licence and that will have to be purchased separately.

So the licence structure is an attempt to get the maximum investment whilst offering a carrot that would be a bargain at US$1 million if you can reach the finish line in five years. The only realistic bidders will either be existing mobile operators wanting to put data traffic on to WiMAX or an insurgent wireless challenger with deep pockets.

A recent case in Ghana shows why there needs to be an alternative network to Vodafone Ghana’s wholesale operation, the National Communications Backbone Company NCBC). The Ministry of Communications issued a tender for the eGhana project which required 10 mbps to be delivered to various parts of the country. One of the country’s ISPs Internet Ghana, on the basis of the prices it was charged by NCBC made a bid of US$8,000 per E1, on the basis of being charged US$4,500 per E1 by NCBC.

It emerged that NCBC had quoted a price that equated to US$1,083.33, clearly well below the sum it charged for wholesale bandwidth to other companies. After a number of unconvincing explanations, it said had made a mistake and would still offer the bandwidth in order to keep its commitment. The case is currently with NCA and in the courts.

Interestingly, the incumbent’s new owners Vodafone have put in place a capacity-related charging structure for wholesale bandwidth so that you get the same price anywhere in the country. Unless you happen to be the company broadband subsidiary and then it looks very like you get a much better deal. Mistakes do happen but a mistake of this magnitude needs a different explanation.

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