Wednesday, July 15, 2009

Why Mobitel was granted concession – NCC


Telecommunications regulator, the Nigerian Communications Commission (NCC) has given more insight on why it granted concession to Mobitel Nigeria Limited, prior to a new management take over.

In a letter addressed to chairman of the Economic and Financial Crimes Commission (EFCC), Mrs. Farida Waziri, the Executive Vice Chairman (EVC) of NCC, Dr. Ernest Ndukwe said that the concession was granted based on facts available to him as chief executive officer of the commission and dully authorized by law as well as statutes to take a decision on such matters.

Corroborating the EVC position on the waiver, was a full report on the issues in the ‘concession’ granted Mobitel Limited and sighted by ITRealms Online, weekend, which indicated that the case was extensively investigated by the special assistant to the
EVC on Legal and Regulatory, Mr. Ayoola Oke.

The investigation which saw to the retrieval of Mobitel’s file at the EVC’s office registry, legal directorate registry and engineering directorate registry, coupled with the interview of some officers at various departments, especially the Engineering, who were desk officers involved with the matter over the years and presumably most familiar with the issues covering a period over four years before the current appointment.

The report noted that indeed a request for waiver of a portion of the debts owed by Mobitel was brought before the EVC to which he had instructed the Director, Legal Services to communicate a denial of the request based on the full facts available to him at the time, but persistence on the part of the company for the waiver claiming that it was wrongly billed while not in operation between 2004 and 2008.

“It was when the matter could not be resolved at the lower level in the Commission that the matter was again escalated to him,” Mr. Oke stated in the report, stressing that at a meeting in September 2008, Mobitel’s representatives informed the Commission of the impending plan to sell the company to new investors.

“They pleaded with NCC that in order to consummate the sale to new investors, it was necessary that the old shareholders cleared all outstanding debts owed the NCC. They also indicated that as a measure of goodwill they had paid N500 million, being two thirds of their total outstanding indebtedness to NCC. They drew the attention of the Commission’s representatives to the fact that the company had been non-operational since 2004 and under receivership since 2005 without any earnings and yet was being billed by NCC for frequencies, numbering plan, etc,” part of the report read.

Mr. Oke’s investigations also revealed that it was after full briefing on the matter that the EVC personally reviewed the company’s file and discussed the relevant documents with the desk officers and “it became apparent to him that there were inconsistencies in the billing and that the estimated bill given to the company had been relatively exaggerated.”

Hence, it was advisable to rather than commence another round of tedious reconciliations and meetings on the issue and since the company was only requesting for a ‘waiver’ or concession that the company was granted 50 per cent discount on the bill of N485,500,000 million for the period 2004 through 2008 when Mobitel was not in operation.

Further, the investigations revealed that Mobitel was inaccurately estimated at N747,945,463.00, which should not have included billing for two states, namely Rivers and Federal Capital Territory (FCT), where it had not rolled out prior to the suspension of operation in 2004 and subsequent receivership.

“These states are Rivers and FCT for 2.2 Gega Hertz (GHz) {N113,4000,000.00} each totaling a sum of N226,800,000.00. … A disputed arrears, which had been recalculated under the Frequency Spectrum Pricing Regulation to N53,699,750.00,” the report read while excluding N20 million already paid on account by Mobitel.

Therefore, bringing the total of overbilling of Mobitel to N298,675,250.00, based on the facts that frequency spectrum slots were obtained by Mobitel Limited from the Ministry of Communications at the time when the Ministry was still in charge of spectrum administration, which entailed that telecom operators were billed for frequency on a per subscriber basis, thus permitting frequency reservation of which FCT and Rivers were reserved frequencies as the company had not rolled out in those cities.

According to the NCC investigations, in spite of several demands by the Commission, the Ministry never forwarded the full records of its spectrum administration to the Commission, hence its Engineering department was left with no other option but to issue estimated bills to licensees and prevail on the operators to pay-up or come forward for bill reconciliation and adjustments.

“These reconciliation exercises often dragged on for a long time and involved many meetings, verification of records, negotiations, offers and counter offers. Generally some of the issues on which such negotiations centre include reservation of frequency spectrum slots, viability, request for frequency slot changes and replacement, reassignment or relocation, identification of roll out areas, etc,” NCC explained.

The Commission said its engineering department made up of engineers were actively involved in such negotiations where the word ‘waiver’ was loosely used whenever the engineers accepted proof of exaggerated estimated billing.

“Thus, technically, these situations were not actual waivers,” the report stated, pointing out that in the case of Mobitel Limited, because it was moribund and had lost its entire staff including the regulatory affairs staff, whose job was to do billing reconciliation and point out errors, “instead in 2008 the company through its acting chairman requested a ‘waiver’ after making a payment of N500 million.”

And based on the aforementioned, the report indicated that it became apparent to the investigators that the company – Mobitel had been over-billed and already over paid after due investigations.

Equally, based on these explanations, the report highlighted Chapter VII, Part 1 on Technical Regulation of the Nigerian Communications Act (NCA) 2003, of which Section 121 vested exclusive jurisdiction to administer frequency spectrum in Nigeria in NCC, which included powers formally vested in the Minister of Communications by the Wireless Telegraphy Act (WTA).

“The principal regulation under the WTA also in its Section 12 vest the power to modify and grant waivers for spectrum license fee in the Director-General of the Ministry by implication is now vested in the chief executive of the NCC after transference of the Minister’s powers to NCC,” Oke submitted.

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