LexisNexis

On your marks, set, go! The rollout of 5G networks in Nigeria

Monday 20 June 2022

Rotimi Akapo

Advocaat Law Practice, Lagos

rotimi.akapo@advocaat-law.com

Introduction

Nigeria's deployment journey for fifth generation (5G) network technology gathered momentum in December 2021, when the National Communications Commission (NCC) auctioned two lots of 100 MHz TDD slots of 3.5 GHz band for the deployment of 5G networks in Nigeria.

Three companies participated in the auction process. The bidding commenced at $199.37m, against a reserve price of $197.4m (75 billion naira) set by the NCC.[1] After 11 rounds of bidding, the auction concluded at $273.6m for each available lot. MTN Nigeria Communications Plc (MTN) and Mafab Communications Limited (Mafab) emerged as the preferred bidders.

The preferred bidders were expected to pay the winning bid price – less the lntention-to-Bid Deposit – no later than 24 February 2022. MTN was required to pay an additional $15.9m to be assigned the preferred Lot One (3500–3600 MHz), while Mafab was assigned Lot Two (3700–3800 MHz) at no extra cost. ln addition, Mafab must acquire the operational licence for the frequency spectrum, known as a Unified Access Service Licence, at an additional cost of around $905,000 (374.6m naira).

The Information Memorandum provides for a validity period of 10 years[2] for the awarded spectrum. In addition, it requires licensees to roll out the service in at least one state in each geo-political zone within the first two years from the effective date of the licence. Further roll out is expected in six additional states in the third and fifth year. The technology is expected to have been fully deployed nationwide between the sixth and tenth year of the award of the licence. A minimum of five sites per state is expected as part of the roll out.

The global journey to 5G

The first generation of mobile networks (1G) was launched in Tokyo in 1979. 1G technology was poor in sound and coverage quality. There was no roaming support between various operators and no compatibility between systems. This meant that phone calls were unencrypted, such that anyone with a radio scanner could intercept conversations. Despite these shortcomings, by 1990 the technology had attracted more than 20 million subscribers.

The success of 1G paved the way for the introduction of second generation (2G) technology in 1993, which transitioned from analogue to digital communication. This switch to digital communication allowed for the introduction of multimedia systems such as SMS text messaging, MMS multimedia messaging and picture messaging. It also allowed for call and text encryption, providing privacy for users. Most importantly, the improvement in speed from a maximum of 2.4 Kbps for 1G to 14.4 Kbps for 2G made browsing the web and downloading data possible for the first time.

The term ‘mobile broadband’ was first used during the introduction of 3G in 2001. Web browsing, enhanced audio and visual streaming, global roaming, video conferencing and GPS were all possible with the introduction of 3G technology, which had a significantly higher maximum speed in comparison to 2G technology.

4G technology was introduced in 2009, further improving speed, security and connection. Still widely used today and with a maximum speed of 300 Mbps,[3] 4G supports the same applications and services as 3G, but is also capable of handling applications that require better speed and connection, such as gaming, streaming media in high resolution and connecting with wearable technology, such as fitness trackers.

5G technology and its role in global development

5G technology was introduced in 2019, bringing with it a host of improvements and upgrades. Increased speed is one of the major improvements that 5G provides. 5G offers speeds up to 10 Gbps – as compared to 4G maximum download speeds of 300 Mbps – meaning users can stream media, download and upload data, and play games on the go faster than ever before.[4]

5G networks are critical components of the much-touted Fourth Industrial Revolution, the digital economy and digital transformation for businesses.[5] More than 180 service providers have launched 5G services globally and it is estimated that there are currently more than 660 million 5G subscriptions globally, most of which are in North-East Asia, followed by North America, the Gulf Cooperation Countries and Western Europe.

Total subscriptions are expected to hit one billion in two years,[6] yet sub-Saharan Africa presently has no subscriptions. This will undoubtedly impact the region’s growth and the proposed economic integration set out in the African Continental Free Trade Area agreement. Nigeria’s spectrum award is a welcome development that will no doubt help foster industrial growth and development.

Challenges to the successful deployment of 5G networks in Nigeria

Although most of the challenges are longstanding issues that continue to hinder the rollout of 3G and 4G services nationwide, some of the specific challenges to the successful rollout of 5G networks in Nigeria include:

  • Low levels of fibre optic infrastructure: Fibre optic cable infrastructure deployment is insufficient. Presently, it is only available in a few urban centres. To achieve full broadband penetration, an estimated 120,000 km of fibre cable would need to be installed to cover Nigeria's land mass. Nigeria reportedly has an outstanding deficit of about 80,000 km of fibre which needs to be addressed to achieve effective nationwide deployment of broadband.[7] There is also the issue of vandalism and damage to existing fibre infrastructure due to road construction.[8]
  • Availability and affordability of devices: The availability and affordability of 5G devices in Nigeria will be a major consideration in the deployment of 5G networks, as it is for the deployment of 4G networks. Deployment of services will occur first in major cities, where there is a higher demographic of customers able to afford the devices and the cost of the service.
  • Access to foreign equipment: The telecommunications (telecom) industry in Nigeria relies heavily on foreign equipment manufacturers and imported technical expertise for the deployment and maintenance of networks. The cost of, and process for, accessing foreign equipment for these purposes continues to be a challenge, especially considering the demands on the country’s foreign exchange reserves by other eligible sectors.
  • Inadequate electrical power supply: The deployment and maintenance of 5G networks require higher density coverage, more base stations and additional equipment. These all place higher demands on the electricity supply. Due to the poor state of the country's power infrastructure, telecom companies will need to invest significant resources to meet the increased power requirements of 5G networks. This will increase the cost of deployment and, where not properly addressed, may affect the quality of service and/or increase the cost passed on to consumers.
  • Insecurity: There is a licence requirement for deployment of 5G in at least one state in every geopolitical zone in Nigeria within a stipulated timeframe. However, it is important to note that nearly all the seven states in Northwest Nigeria are experiencing security challenges, which has led to the temporary shutdown of telecom services in some areas. Security will continue to be a challenge as providers roll out 5G.
  • Right of way (ROW): High ROW fees continue to hinder the deployment of telecom infrastructure in Nigeria. Despite the federal government proposing a nationwide fee for the procurement of ROW, various states continue to administer ROW differently, with their financial demands often frustrating operators' rollout plans. Divergent policies and inability to obtain ROW permits from various states is also a primary cause of low-level fibre optic deployment.[9]
  • Multiple taxation and regulation: Although this challenge is not new, it will be an additional challenge for the providers of 5G networks. It is further complicated by Nigeria’s federal system of government, which has seen different levels of government and their agencies impose duplicate, and often arbitrarily determined, charges on telecom infrastructure companies.
  • Regulatory and legal issues: The legislature and regulators will need to develop innovative regulations and stakeholder management techniques to manage the complex legal and regulatory issues that come with adoption of 5G. A legal and regulatory approach that does not hinder innovation and adoption should be adopted by the appropriate authorities for users to benefit from the applications and services that will be built on 5G technology.

Conclusion

The 5G spectrum award is a critical component of the stated objectives listed in both Nigeria’s National Broadband Plan 2020–2025[10] and the National Digital Economy Policy and Strategy. Both documents acknowledge the pivotal role that rapid and pervasive rollout of high-quality broadband infrastructure and services will play in accelerating national socioeconomic development, thereby transforming Nigeria into a leading digital economy.

Internet services in the country are currently provided on 2G, 3G and, increasingly, 4G mobile networks. Though 4G coverage is available to 37 per cent of the population, download speeds in the country are generally uncompetitive with other countries in the same income group

Rapid rollout of broadband services will address various socioeconomic challenges faced by the country, including the need to grow its economy, create jobs, rapidly expand the tax base, and improve digital literacy and education standards. The rollout will also address identity management and security challenges through the effective use of technology, increase financial inclusion and deliver a broad range of services to Nigeria’s people, improving quality of life for much of the population and advancing the country’s progress towards attaining the United Nations 2030 Sustainable Development Goals.

 

[1] It is worth noting that during the 2001 auction for Global System for Mobiles (GSM) licences, the reserve price was $100m, while winning bids were $285m.

[2] It is important to mention that the validity period of the GSM licences issued in 2001 was for 20 years. In commenting on the lnformation Memorandum, MTN requested an extension of the validity period for the 5G licence to 20 years.

[3] However, 4G adoption in Nigeria was 12.2 per cent of total connections within the same period. Mobile broadband download speed is still very low, with Nigeria ranked 104th in the world as of July 2019.

[4] lfrah Mukri, ‘A Brief History of 5G’ (mobiles.co.uk, 16 August 2019).

[5] ln recognition of the importance of the digital economy and its transformation benefits for Nigeria, the Ministry of Communications and Digital lnfrastructure published the ‘Nigeria Digital Economy Policy and Strategy’.

[6] Ericsson, ‘Mobility Report’ (Ericsson.com, November 2021).

[7] As of December 2020, total land fibre deployment was 43,898.5 km.

[8] The Cybercrime (Prohibition, Prevention, Etc) Act 2015 envisaged the declaration of telecommunications infrastructure as critical national infrastructure with the attendant protection, which is expected to curb these incidents. However, this declaration is yet to be made by the President.

[9] Cosmas Kemdirim Agubor, Nkwachukwu Chukwuchekwa and Longinus Sunday Ezema, ‘5G Network Deployment in Nigeria: Key Challenges and The Way Forward’ 6(3) 2021 European Journal of Engineering and Technology Research https://ej-eng.org/index.php/ejeng/article/view/2068/1059 accessed 13 June 2022.

[10] This broadband plan is designed to deliver data download speeds across Nigeria at a minimum of 25 Mbps in urban areas and 10 Mbps in rural areas, with effective coverage available to at least 90 per cent of the population by 2025 at a price not more than 390 naira per 1 GB of data (two per cent of median income or one per cent of minimum wage).