Fresh Digitisation Plans Unveiled amidst Fund Paucity
The die is cast; the deadline is missed and life goes on, but the project cannot be abandoned, hence, the continued efforts on all-important digital switch over. But nothing has changed, except that the June 17 ITU deadline had come and gone; it is all plans without means of implementation. SAMSON AKINTARO reports.
It is no longer news that Nigeria has failed to meet the June 17 deadline set by ITU for countries to switch over to digital broadcasting, incidentally, it is not the only African country to miss this deadline neither is it the only one that failed to switch off analogue in the West African sub-region. Thus, even in failure, many can still heave a sigh of relief that there would not be any serious impact—at least for now—in terms of interference as other neighbouring countries are also yet to complete their switch over.
While questions may continue to arise about how countries missed the deadline despite the fact that they had nine good years to prepare for the switch, one common and recurring answer from Nigeria and some other countries is: Lack of fund. At the expiration of the deadline, only three African countries: Malawi, Mozambique, Rwanda and Tanzania were able to made the switch. Yet, at this point, there is no indication that some of the remaining countries now have the fund to execute the switch over projects. Nigeria, for instance, is still unsure of where the money for the switch projects which have been outlined will come from.
The Journey
Certainly, it could not be said that the country has not been planning for the switch over the years, albeit, many would see those plans as unrealistic given the lacuna created by funding. Of course, Nigeria’s digitisation process took off as far back as October 13, 2008 with the inauguration, by the late President Umaru Yar’Adua, of the Presidential Advisory Committee (PAC) on Transition from Analogue to Digital Broadcasting in Nigeria. The panel presented its report on Monday, June 29, 2009. However, no follow-up step was taken until April 4, 2012 when the Federal Executive Council claimed a release of White Paper on the report.
Earlier in 2007, while appreciating the vital need to keep up with the rest of the world in this ITU-led global digitisation movement, the government had also approved June 17, 2012 as Nigeria’s transition date, three years ahead of the ITU mandate. The justification then, according to the National Broadcasting Commission, was to use the three years (June 17, 2012 to June 17, 2015) to address whatever hiccups arising from the switch-over and perfect the mechanism before the final date. Great plans! Many would say. But that was where it ended, as the plans could not materialise due to what industry analysts described as lack of political will on the part of the government.
Eventually, with the release of a government White Paper on the digitisation, the government in December 2012 inaugurated a 14-man transition Committee called DigiTeam Nigeria, with Engr. Edward Amana as chairman. The new team led by Amana, set a fresh date of January 1, 2015 as the switch-off date from analogue broadcasting, with plans to conclude the digital switchover in Nigeria before the June 17, 2015.
To that end, NBC, which is the arrowhead of the transition process, had directed all multipoint multimedia cable distribution system and direct-to-home operators, to digitise their operations, which was adhered to and was successfully done. As part of the process, the NBC chose the city of Jos in Plateau State as the test city for the digital switchover from analogue to digital terrestrial television transmission.
The choice according to NBC DG Emeka Mba, “is as a result of the cluster of government-owned and privately-owned broadcasting stations in the city, coupled with its compactness and accessibility. Jos is described as the home of the first colour television in most African countries, after Tanzania.
On June 30, 2014 the country achieved what would be the starting point be of the digital migration plan as it launched the first phase of the digital switchover in Jos, Plateau State. And with the successful launch, Emeka Mba became more optimistic as he assured Nigerians of a smooth nationwide digital switchover by January 2015.
According to him, “the success attained in the Jos pilot digital switchover (DSO), is an indication that the planned phased switchover from analogue to digital terrestrial broadcasting, would also be successful, provided that the DigiTeam, which is the committee charged with the responsibility of switching Nigerians from analogue to digital, remained committed.
NBC had drawn a phased rollout plan, beginning with the pilot city switchover in Jos, and it its plan was to complete other phases on or before January 1, 2015. The commission was able to ride on the backbone of NTA StarTimes to accomplish the Jos pilot city switchover, having designated NTA as the national digital signal carrier for the country.
Unfortunately, all these efforts and plans could not take the country to a point where it could be counted among the few African countries that met the digital switch deadline. Be that is it may, the NBC and its team are forging ahead. A meeting of the digitisation Contact Group, comprising set top boxes manufacturers, signal distributors, and broadcasters in Lagos after the June 17 deadline had highlighted concrete plans for Set Top Box Manufacturing, new timelines for phased switch over and of course the public enlightenment strategies mapped out. But the key to bring all these plans to fruition again, is funding.
NBC Targets STB Delivery to Households at $20
With the deadline missed, a clearer picture of how the country intends to achieve a seamless digital switch over is beginning to emerge. And that came with the revelation that the government will be subsidising Set Top Boxes (STB) to make it affordable for all categories of households in the country. The target, which was revealed at the digitisation Contact Group meeting held in Lagos, is to have the decoders sold to users at $20 which is equivalent to about N4,000 based on current exchange rate.
According to the NBC DG, the Commission considered $20 as affordable because most households who currently have analogue TVs spend more than that amount on acquiring mobile phone and also spend at least $2.50 per month on mobile payments. “We also think this price point works in comparison with alternative ways of going digital via pay TV” he said.
Going by the latest arrangement, NBC will pay subsidy to OEMs calculated to achieve $20 target price, hence, the licensed manufacturer are to import STB paying a reduced landed cost due to the subsidy. To ensure that retail buyers are not short-changed, the NBC has said it will compel the OEMs to print the $20 retail price on the carton and also advertise widely for the people to know. In addition to that is the plan by NBC to conduct spot checks on the manufacturers to ensure that the STBs are produced to amounts subsidised.
Plans for Transmission
According to NBC, the government had come up with some policy decisions that will enhance the smooth transition from analogue broadcasting to digital broadcasting. And as stated in the policy, there will be separation of functions in the broadcast industry, which will see the broadcaster being responsible for the contents of the broadcast while a signal distributor or carrier will be responsible for the transmission of the signals to the viewers at home.
Three signal distributors or carriers are to be licensed, one of which is to evolve from the Nigerian Television Authority. However, stakeholders have warned that with more than one licensed transmission operator, the country must be very careful to avoid duplication of DTT networks in each area. If this happens, they said the country risks doubling the capital and operating costs for the operators, while the system may also lose channel capacity due to inefficient spectrum use
However, to avoid those scenarios, the NBC it is already designing a process to avoid duplication. According to the DG, Nigeria will be divided into Market Designated Areas (MDA’s) and these MDA’s will then be grouped to achieve a mix of: Cities and rural areas, so that each MDA Group is roughly equal. “NBC will guarantee broadcaster transmission payments for each MDA to offer security to justify the investment. Signal distribution to each MDA can be achieved via satellite (piggy backing off the DTH in fill service thereby avoiding additional cost) or via other means” he said, adding “transmission pricing will allow operators to make a reasonable return on their investment without making it uneconomic for channels.”
Switch Date Yet Uncertain
When will Nigeria switch over to digital broadcasting? This is a question that not even the NBC DG can answer at this moment despite all the plans and arrangements the Commission is making. And just like the Biblical quote “money answereth all things”, the only answer to this question is money.
Long before the ITU deadline came to past, the NBC DG had been lamenting about the lack of fund and how it might affect the switch over process. The DG had disclosed that the country would need about N69 billion for the project to scale through, with a projection that the immediate past administration led by Goodluck Jonathan would provide substantial part of the funds, while the remaining would be independently sourced by the commission. Though the budget had been fixed about five years ago, the funds never came even as at the time the last administration left office on May 29. This budget include the cost of subsidy for some homes in Nigeria to provide them with setup boxes and cost of buying back analogue transmitters from all the operators, cost of publicity, roll-out obligations and some subsidy for signal distributors to make sure they meet up with the roll-out time, funds for content and consultants.
And based on the current scenario in the country where the price of oil, which is the major revenue earner for the country has dropped drastically, resulting in shortage of funds for government to even pay workers’ salary, the situation becomes dicier for the broadcast industry, and the telecom sector which is earnestly waiting for the digital dividend spectrum. And that was why the NBC DG frankly declared at the Contact Group meeting in Lagos: “if you ask me when are we switching over, I will tell you, count 18 months from when fund is available”.
Lack of Political Will
Aside setting up committees and releasing white paper for the digitisation process, it is believed that the Nigerian government has not shown serious commitment to the digital switch over project. Speaking frankly, Chairman of the DigiTeam set up to implement the White Paper has said even a migration target of 2017 might not be achievable for the country “the political will, which is about the funding, is not there yet,” to drive the process. Amana said the planning has been done – set-top box manufacturers have been chosen and signal distributors have been appointed. But “not a single penny” has been released by the government for the “crucial public awareness campaign that will drive the project”.
Bank Borrowing: The Last Resort
As fund is not forth coming from the government, the NBC has opted to use what it has to get what it wants, hence, it has decided to use Digital Dividends, which is the spectrum to be released and monetise after the digital switch as collateral to raise money from banks in order for the commission to use part of the money to implement the process. “We have commissioned a team of international spectrum experts to value the cost of the Digital Dividend Spectrum and the valuation points to the fact that government can make in excess, what it will spend,” Emeka said. Presently, the NBC said it is now at the stage of getting approval from the government to go ahead with the borrowing.
Global telecom body, the Global System for Mobile Communications Association (GSMA), had estimated that broadcast frequencies’ sale as a result of digital switch over (DSO) could fetch the country over $2 billion. The group also said with the release of digital dividend spectrum, sub-Saharan Africa could grow its gross domestic product (GDP) yearly by $82 billion by 2025; earnings by about $18 billion in tax revenues and creating no fewer than 27 million jobs.
According to industry Experts, Nigeria will be spending less than what it will earn from digital dividend, hence, the borrowing option may not be a bad idea. They also noted that aside the direct revenue from digital dividends, Nigeria also stands a chance to benefit economically from the digital switch given the impact broadband availability has on GDP.
Long Wait for Digital Dividends
While the country may be celebrating that the much anticipated signal interference after the failure to switch by June 17 deadline will not after all affect TV viewership due to the fact that all neighbouring countries have also failed to switch over, it will be missing the huge economic benefits that should have accrued from digital dividends. With serious attention on broadband as a tool for economic development, the telecom regulator, Nigerian Communications Commission has been banking on the release of spectrum currently being used by broadcasting stations to drive broadband penetration post June 17 digital migration deadline. This perhaps was one of the reasons the regulator declared this year as ‘the year of broadband’ hoping that it would get more spectrum after broadcasters might have vacated the band. Unfortunately the failure to meet the deadline and the uncertainty over when the country will eventually switch over is casting shadow over the ambitious broadband target. As a matter of fact, the wait for the digital dividends is still indefinite.
The Digital Dividend band is attractive because it offers good in-building coverage in urban areas and low cost coverage in rural areas where 40-80 per cent of the population live. It is 700/ 800 MHz, which offers 60 MHz or more of additional spectrum. The spectrum is at relatively low frequencies, below 1 GHz.
Digital Dividend spectrum is released when television broadcasters switch from analogue platforms to digital only platforms; part of the electromagnetic spectrum that has been used for broadcasting will be freed up because digital TV needs fewer spectrums than analogue television. After the auction, GSM operators on the 2100MHz bands will move to the new band slots.
According to industry experts, “the spectrum allocation will allow for re-planning/clearance of broadcast TV stations in the band to lower band, as well as development of common-channelling plan for the whole region which should be followed by common-standard development, chip-set manufacture, and mass production of relevant handsets and base stations.”
Speaking on the expected digital dividends, Mr Segun Ogunsanya, CEO, Airtel Nigeria said currently, GSM operators have only 15MHz assignment in 1800MHz band which is paired with 5MHz on the 900MHz. “With the 700MHz spectrum allocation, GSM operators can significantly increase their capacity, improve quality, and also reduce capital expenditure, and the savings from operating costs will translate to affordable telecommunications services.
“We urge government to urgently finalise and conclude the 700MHz allocations. There should be effective coordination between the NCC, NBC and National Frequency Management Council (NFMC) to ensure that the 700MHz spectrum band is cleared and released for telecoms services as recommended by the ITU,” he said, pointing out that the release of more spectrum can potentially impact positively on Nigeria’s GDP and lead to creation of more jobs.
The 700MHz Spectrum allocation can lead to duplex arrangement of 45MHz uplink (going leg) and 45MHz downlink (return leg) with a minimal duplex spacing of 10MHz. The 45MHz can provide 15MHz assignments into three times. The ITU said addressing the Digital Dividend issue provides for a great deal of global harmonisation of the use of the 700MHz band for all regions by the services which need it most.
A telecom source, who would not want to be named lamented that this all-important spectrum bands are still in the hands of the Nigerian Broadcasting Commission (NBC). “As at today, none of these frequencies has been released in spite of the fact that the deadline for the DSO has passed. Besides, we are not sure yet whether any of these broadcast media is ready for digital transmission.”
Also speaking on the importance of the digital dividends, President, Association of Telecoms Companies of Nigeria (ATCON), Mr. Lanre Ajayi, said releasing the spectrum bands to investors that will roll-out service on them will add a new fillip to the industry, especially now that the next revenue frontier of the industry has shifted from voice to data. He said: “It will be an advantage for the country if these spectrum bands are released by the appropriate authority for NCC to allocate to would-be applicants.”
Information gathered shows that while digital dividend spectrum can be viewed as a big ticket item that could ultimately facilitate broadband roll-out of Long Term Evolution networks, the Nigerian Communications Commission (NCC) and the Nigerian Broadcasting Commission (NBC) are also exploring opportunities for using TV ‘whitespaces’, or the vacant and unused frequencies that can be made available at locations where spectrum is not being used for licensed services, to help achieve last mile connectivity in rural areas.
However, the current scenario does not give a clue to when all these will be available for broadband use. Certainly, the telecom industry will have to wait longer than expected as NBC tries to sort out its funding challenge.