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$470m OpenSkys Telecoms Deal Mired In controversy

$470m OpenSkys Telecoms Deal Mired In controversy Muhammadu Buhari

As President Muhammadu Buhari and Vice President Yemi Osinbajo settle down to deliver on their mandate, especially the fight against corruption, one very crucial area the administration is expected to look into is the controversial sale of National Public Security Communications System network to OpenSkys Services Limited. Controversy over the sale of that important security communications facility to a private concern has refused to abate, especially given the haste with which senior officials of the immediate past administration ignored due process.

Officials of OpenSkys Limited claimed that it was assigned the 450 MHz spectrum in 2009 by the Nigerian Communications Commission to provide communications services throughout the country. However, ever since the issue of upgrading the facility to a new frequency arose, stakeholders have continued to allege that the transfer of the security network to OpenSkys Services did not follow a transparent and legally guided process.

In the agreement with NCC, OpenSkys Services was expected to pay N350m for the retuning of the old transceivers supported by the frequency assigned to the Nigeria Police in 2009 as well as buy new communications equipment for the force. OpenSkys Services claimed that it paid the stipulated amount to the Nigeria Police in addition to spectrum fees totalling N892m to NCC.

But further curiosity was aroused about the genuineness of the transfer process when it was discovered that the transaction could not receive a presidential approval. This was due to the recommendations of an advisory panel, which was said to have advised the government that the transaction could compromise national security.

Former executive commissioner at the NCC, Dr. Bashir Gwandu, was said to have been persecuted for his principled stand against the transfer of the NPSCS to OpenSkys. The court ruled in favour of Gwandu, who was removed from office as the acting Chief Executive Officer of NCC, and awarded damages.

Unwittingly, Gwandu had offended the powerful political figures that backed the multimillionaire owner of OpenSkys Services Limited, Sir Emeka Offor, to clinch the deal. The embattled former NCC chieftain insisted that apart from endangering national security, “the sale was illegal and a waste of public funds.”

The Federal Government, in its efforts to beef up the capacity of Nigeria Police, to fight crimes including kidnapping and terrorism conceived the NPSCS, which was designed and built by a Chinese firm, ZTE Corporation. The communications system has three components and costs $470m. The components include about 2,000 pre-installed security cameras with capacity for video surveillance and videoconferencing crucial to the fight against crime. This component was installed all over the Federal Capital Territory.

Then there is the voice spectrum, which operates on a 450 megahertz frequency and comes with about 1.5mn telephone lines. The next component is the microwave frequency used for data transmission. Of the three components, the voice spectrum generates much revenue for the network.

At inception, the project was facilitated with a $399.5m loan sourced from China Export-Import Bank, in addition to a $70.5m counterpart fund from the Federal Ministry of Finance. But communication experts insist that the financial outlay of the project should not exceed $370m, raising doubts about the $470m claimed to have been spent on it. Yet of the whole network tripod, NCC had issued licence for just the 450 megahertz frequency, which is the voice component to OpenSkys, thus leaving licences for the other two, the cameras and microwave frequency, unissued as yet.

Therefore, the single licence issued to OpenSkys is at the root of the controversies. Next to its cost-effective operations, the maintenance is also said to be quite flexible. While stakeholders express reservations about the security implications of ceding the network to OpenSkys, a private enterprise, technical experts worry that the cost of the project must have provided some easy money to certain individuals. For instance, eight years ago, a consultant estimated the frequency to cost about $50m, with the NPSCS separated from it. How the profitable spectrum was sold to OpneSkys for $6m is mind-boggling. The deal, which was begun during the regime of the Executive Vice Chairman, Ernest Ndukwe, was consummated under the present EVC, Dr. Eugene Juwah.

The protracted battle for ownership and operation of the 450mhz spectrum has continued simply because of its considered worth. Various interest groups have been moving against the deal based on both its humongous amount and the security implications of ceding what was considered a national security resource to a private company.

Matters came to a head when ZTE completed the sophisticated network and the Federal Government called for bids for a contract to handle the day-to-day operations. OpenSkys Services Limited was accused of engaging in subterranean moves to hijack the process instead of bidding alongside other firms.

Sources at the Presidency and the police disclosed how Offor declared that the frequency band on which the network was built belonged to his firm, OpenSkys. They contended that with the claim of ownership of the frequency, Offor positioned his company to take over the network as a majority stakeholder thereby making the government a minority stakeholder. Such scheming is believed to have given rise to the dust being raised about the deal.

However, contrary to the alarm being raised by concerned stakeholders, OpenSkys Services Limited says it did not engage in any shady practice to acquire the frequency. The spokesman of the company, Dr. Edwin Ndukwe, in May 2015, issued a statement stressing that OpenSkys Services Limited “acquired the frequency through a transparent and legally guided process and in compliance with all applicable rules and regulations.”

Ndukwe stated that early in the process, “experts determined that the Global Open Trunking Architecture technology supporting the Nigerian NPSCS network was hurting law enforcement communications efforts, and therefore, hurting Nigeria.”

He added that it was against that background that his company then proposed to build nationwide a 4G LTE network, which was expected to provide a more efficient and viable platform for broadband services.

“And once the financial commitments to NCC were satisfied, OpenSkys Services, in conjunction with its technical partners, immediately presented plans to achieve efficiency and greater effectiveness in the fight against terror through a robust frontline security network for the government,” Ndukwe stated.

Yet despite the clarifications by the company’s spokesman, OpenSkys remains bogged down by the issue of national security and transparency. This is because while OpenSkys management was still in the process of finalising payment for the frequency, the Federal Government had launched the security communication programme, the NPSCS, to tackle the Boko Haram insurgency. Under that programme, the police were given the right to install the project on the 450mhz and administer the security system through NigComSat on its behalf.

When Openskys completed its payment, it wanted to take full control of the frequency as well as the management and operation of the NPSCS, ostensibly so that it could install part of the frequency for commercial purposes, especially the very lucrative high speed Internet and communication. Thus, the contention over ownership triggered a lot of concerns.

Worried by the ominous implications of ceding the frequency to a private firm, a rights group based in the United Kingdom, known as Nigerian Integrated Security System Watch, urged President Muhammadu Buhari, to investigate the transaction involving the sale of the NPSCS network.

The group lamented that Nigeria could be swindled to the tune of $470m (about N98bn) amid the ongoing economic crisis. Mallam Garba Shuaibu, who signed a statement on behalf of NISSW, raised posers on the “rationale for the transfer of the management of a national security resource to a private company.” With such calls by well-meaning and well informed operators in Nigeria’s telecom industry, the buck of investigating the three-year-old deal stops on President Buhari’s table.


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$470m OpenSkys Telecoms Deal Mired In controversy
Kenneth Okonkwo

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