Nigeria: DTT Process snarled up in legal battle over number of signal carriers

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Nigeria’s signal carrier licensing process is in a mess because too many different interests have had to be satisfied. Nigeria was never going to meet the ITU deadline of June 2015 but legal action by one of the successful bidders means that the whole process will be considerably delayed.

In May 2014, the broadcast regulator, National Broadcasting Commission (NBC), issued a tender for a second DTT Network Operator Licence in Nigeria: “Licence to roll-out and operate a national terrestrial broadcasting signal distribution network in the Federal Republic of Nigeria.”

Because of the absence of a policy framework for so long, there were already two organisations operating DTT licences: the national broadcaster in a joint venture with Chinese Pay TV operator StarTimes Nigeria and DStv’s DTT offering, GOtv Nigeria (provided by MultiChoice).

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As part of the wider government objective of ensuring a smooth transition from analogue to digital television broadcasting, the Government has decided to award three Broadcasting Signal Distribution Licences, one of which was to be reserved for the infrastructure entity that will be carved out of the existing Nigerian Television Authority (NTA). The purpose of NBC tender in May 2014 was to award a second licence through this bidding process to stimulate competition in the broadcasting signal distribution market segment.

Following evaluation of the submissions for the Expression of Interest (pre-tender process), the following firms, in alphabetical order, were shortlisted as having met the criteria for prequalification for the bid proper:

i. Channels Incorporated Limited
ii. MTS Communications Limited (the consortium of the existing larger broadcasters led by Daar)
iii. Phase 3 Telecoms Limited (a fibre wholesale bandwidth operator)
iv. Pinnacle Communications Limited
v. Platinum Plus Television Limited
vi. Richfield Technologies Limited
vii. Telly4 Africa Limited (one of the parties to the NTA/Star Times joint venture)
viii. Thomcast NGT Limited
ix. Trendcorp Africa Limited

In July 2014, Pinnacle Communications Ltd (PCL), a Nigeria based company, was awarded a licence to provide DTT signal distribution. Although some details of the licence contract had still to be finalized, it met with NBC the following month with its two US-based partners - GatesAir  and  Jampro - to assure NBC that it was ready to move forward with the DTT roll-out.
We understand that GatesAir, Jampro and Pinnacle Communications Ltd had put a lot of effort into defining the deployment strategy and creating a schedule to match NBC requirements, as well as working through technical validation to match Nigeria needs in terms of coverage and State infrastructures to insure the DTT deployment would be a success.

According to Pinnacle Communications Ltd contrary to earlier written assurances,  NBC provided authorizations for signal distribution to three companies including Details Nigeria Limited (the licencee for DStv’s GoTV), StarTimes and MTS Communications (a consortium of existing larger broadcasters). The award of approvals, authorizations and licences by NBC and its DG to MTS Communications Limited, Details Nigeria Limited (GoTV) and NTA-Star Network Limited did not follow any due process.

In November 2014, Pinnacle Communications Ltd took out a legal action against NBC for violation of the Nigerian Government policy on digital switchover. It maintained that NBC had breached the contract it signed with it as contained in the Digital Switchover white paper. 

The contractual agreement provides that only two signal distributors are to be licensed at the initial stage, that Pay-TV licensees would have their networks on one of the two signal distributors appointed and that market conditions could require licensing of additional signal distributors.

The NBC got itself into this legal mess because it decided to give the consortia of the larger broadcasters a licence as well as Pinnacle and also to give DStv’s Go TV a DTT licence.

Nigeria was never going to meet the ITU deadline of June 2015 so has simply reset the date for the deadline as June 2017. But with this on-going legal battle, even that deadline must be in doubt. The Court only got to hear some pre-trial applications on 19 November 2015.

Pinnacle has claimed that NBC had represented that there was no other digital terrestrial signal distributors in Nigeria apart from Nigeria Television Authority (NTA), and showcased Pinnacle Communications as the second and only other terrestrial signal distributor in Nigeria. It stated that the award of approvals, authorizations and licences by NBC and its DG to MTS Communications Limited, Details Nigeria Limited(GoTV) and NTA-Star Network Limited were not made public.

The plaintiff stated that there will be a technical glut of infrastructure with insufficient channels and content if all of the now licensed operators were to roll out concurrently. Pinnacle Communications asked the Court to grant an order of perpetual injunction, restraining GoTv, NTA-Star Network and MTS Communications Limited from engaging in the business of signal distribution under the current licensing framework.

This is not the first blunder by NBC in its management of the digital transition. In September 2015 it sold without any public fanfare some of the soon to be released 700 MHz spectrum to MTN for N34 billion.

But according to This Day, the Director General of NBC, Emeka Mba, said that the spectrum was sold at a time when it was still under the control of NBC, and that NBC sought and received approval to raise money to pursue its Digital Switch Over (DSO) mandate by licensing commercially a portion of the spectrum for converged services use from the previous Government.

Mba said the licensing was handled transparently and was done as part of its convergence service. Many commentators at the time pointed out that these kinds of spectrum allocations were carried out by the telecoms regulator NCC. The allocation was subsequently withdrawn.

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