TRANSPARENCY ISSUES DOG $400M GSM DEAL IN NIGERIA
The recent announcement by the Nigerian Communications Commission (NCC) that Mubadala Development of United Arab Emirates has been offered Nigeria’s fifth GSM slot for $400million has raised issues about how it came to make the deal..
Across the industry, questions have continued to be raised about the regulator’s announcement of the spectrum packages that were offered the Abu Dhabi based company in what one analyst called an ‘under-the-table-deal.’
NCC chief, Ernest Ndukwe, last week deflected blame for the offer saying that it emanated out of a negotiation between President Olusegun Obasanjo and the government of UAE. Ndukwe, in an interview published last week in Nigeria’s Businessday, says the spectrum belongs to the government which could do as it wishes with it and believes rather that the sale actually promotes bilateral relationship between the two nations.
“If you look at our laws, we retain fees for licensing but we don't retain fees for spectrum. Spectrum that is sold (goes) straight to the Federal Government coffers. So when you come from that premise then you would understand that when there is a spectrum to be sold, the federal government knows that it is their property”, he says.
Ndukwe’s critics say that his defence that the President offered the licence to the UAE offers no comfort as the regulator had in December last year announced to the local and international investment community that new licences were on offer through an auction including the one that was sold as well as the much-sought-after spectrum for 3G networks.
The regulator has said that international consultancy, PA Consulting Group, had been hired to see through the process as part of its commitment to “implementing Government policy on telecommunications by having open and transparent development within this important part of the Nigerian economy and infrastructure.”
Prior to that time, there has been widespread industry speculation that an offer had been made to Arab investors, facilitated by former Chairman of UBA Plc, Hakeem Belo-Osagie.
However, the news was largely taken with a pinch of salt as industry watchers, looking at the track record of competitive bids for previous spectrum licences since the advent of the Obasanjo Government doubted that the fifth GSM licence would be issued in a disimilar manner.
That view was further bolstered when consultant to the proposed auction held exploratory talks with major operators and likely bidders made up of the top mobile operators, among others, to open up discussions on the way forward. It had, just like the NCC, assured that a notice was under way that would stipulate the rules guiding the process.
“We were also assured that the spectrum that was sold to UAE was still available as part of the overall offer and on the basis of this, we discounted the speculations that it had been offered someone else”, says a top official of a telecoms company. Industry players were further reassured when NCC had in December last year announced that the spectrum was still on offer.
During the exploratory talks, the consultant rekindled hope further when it named the last GSM slot as part of the package on offer in the planned auction, a source confirmed to Technology Times weekend noting that this had stimulated considerable activity among local and international investors looking into stakes in the fast-growth Nigerian market.
The regulator in December last year said in a statement attributed to Ndukwe and posted on its website, which as at press time, is still available for public access that the Board of NCC has approved, “the auction of radio-spectrum in the 1800 MHz, 3G and 450 MHz, bands, leading to the award of new licences.”
Ndukwe also confirmed the appointment of PA Consulting Group, a leading firm of international management and telecoms consultants tasked by the NCC with assisting in developing and overseeing the auction and award of licences, “to ensure the process meets international best practice.”
Ndukwe has a word for critics of the process when he said that, rather than being conducted under the table, NCC which was not part of the high-level negotiations that resulted in the licence offer, sent out words to the public soon as it was notified by the Presidency. “I am not sure it is right to say it was done in secret because all the information was put out in the public view as soon as we were aware of it as far as the NCC was concerned”, he adds.
The negotiating team of the current Minister of Energy then Minister of State for Petroleum, Edmund Dakoru; Minster of FCT, Nasir el-Rufai and Minister of Finance, Nenadi Usman formed the trio that were given presidential mandate to explore investments from the oil-rich Middle East.