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High Spectrum Prices Hit Nigeria, Others

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  • High Spectrum Prices Hit Nigeria, Others

Spectrum prices in Nigeria and other developing countries are, on average, more than three times higher than in developed countries when income is taken into account.

This is according to Spectrum Pricing in Developing Countries, a new report released by the global system for mobile communication (GSM) Association (GSMA). It found high spectrum pricing as a major roadblock to increasing mobile penetration in developing nations.

The study was designed to identify and investigate trends in spectrum pricing in developing countries, their drivers and potential impact on consumers.

Government and regulators were found to play a key role in increasing spectrum prices through policy decisions. Administrations are able to do this by setting very high reserve prices for spectrum auctions, constricting the supply of spectrum, which forces operators to overpay, not publish a spectrum roadmap and use poor award rules.

The organisation says policies that seek to maximise state revenues can have a negative influence on consumer outcomes, including more expensive mobile services and reduced network investment.

Better spectrum pricing policies are needed in developing countries to improve the economic and social welfare of the billions of people that remain unconnected to mobile broadband services, highlights the report.

Head of Spectrum at the GSMA, Brett Tarnutzer, said: “Connecting everyone becomes impossible without better policy decisions on spectrum.

“For far too long, the success of spectrum auctions has been judged on how much revenue can be raised rather than the economic and social benefits of connecting people. Spectrum policies that inflate prices and focus on short-term gains are incompatible with our shared goals of delivering better and more affordable mobile broadband services.

“These pricing policies will only limit the growth of the digital economy and make it harder to eradicate poverty, deliver better healthcare and education, and achieve financial inclusion and gender equality.”

The GSMA analysis is based on the assessment of over 1 000 spectrum assignments across 102 countries, including 60 developing and 42 developed countries, from 2010 through 2017.

Among the countries included in the analysis are Algeria, Cameroon, Bangladesh, Brazil, Colombia, Egypt, Ghana, India, Jordan, Mexico, Myanmar and Thailand; all markets where spectrum licensing is a priority.

Concerning Nigeria, the report recalled that in May 2016, the Nigerian Communications Commission (NCC) auctioned 2×70 negahertz (MHz) of spectrum in the 2.6 gigahertz (GHz) band. The spectrum was split into 14 lots of 2×5 MHz with a reserve price of $16 million per lot. Although the price was not particularly high when benchmarked, the price denomination in US dollars made the potential investment riskier given the instability of the local currency exchange rate against the US dollar over that period. The naira depreciated by more than 20 per cent in the two years preceding the auction and experienced an even more severe drop (42 per cent) over the two years after, making it more expensive for operators to finance their spectrum payments

Eventually, one bidder (MTN) secured six of the lots available (equivalent to 2×30 MHz of spectrum) at the reserve price, while the rest of the spectrum remained unsold. Leaving a large amount of capacity spectrum unsold will likely hinder the development of the mobile market in Nigeria, which is one of the world’s most populated countries. Nigeria’s 4G market penetration trails the average for sub-Saharan Africa.

Way forward

The GSMA is of the view that a well-designed spectrum policy is a critical input for a thriving digital economy.

The report notes high spectrum prices and lack of transparency in assigning spectrum can discourage LTE rollouts, constrain consumer welfare and delay the closing of the digital divide.

It said: “Making substantial amounts of spectrum available at prices that lead to an efficient and growth-promoting allocation of spectrum can help realise vital digital development goals through affordable, high-quality and widespread broadband services.

“With advanced 4G technologies requiring increasing amounts of spectrum, it is crucial that spectrum policies in developing countries support fast and sustainable development of the mobile sector. This helps realise maximum benefit for citizens, particularly the digitally excluded.”

The GSMA report puts forward four ways to remedy issues of high spectrum prices for developing nations. The first is to set modest reserve prices and annual fees, and rely on the market to set prices. Number two is to license spectrum as soon as it is needed and avoid artificial spectrum scarcity. The third is to avoid measures which increase risks for operators; and lastly to publish long-term spectrum award.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Flutterwave Teams Up with EFCC to Launch Cybercrime Research Hub in Nigeria

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Flutterwave has partnered with the Economic and Financial Crimes Commission (EFCC) to establish a cutting-edge cybercrime research center in Nigeria.

This initiative comes in response to recent significant financial losses suffered by the payment technology company due to fraud.

Flutterwave, a leading payment technology company in Africa, has faced substantial financial setbacks due to cybercrime.

Recently, the company obtained a court order to recover $24 million lost to unauthorized Point of Sale (POS) transactions.

Also, Flutterwave reportedly lost N11 billion ($7 million) to fraudulent accounts in April 2024. These incidents have underscored the urgent need for enhanced cybersecurity measures.

The partnership was formalized through a memorandum of understanding (MoU) signed on June 14 in Abuja by Flutterwave’s CEO, Olugbenga Agboola, and EFCC Secretary, Mohammadu Hammajoda.

The signing ceremony also saw the presence of EFCC Chair, Ola Olukoyede, and Christopher Gray representing the FBI, among other notable figures.

Agboola emphasized Flutterwave’s expertise in combating internet fraud, particularly the tactics employed by notorious fraudsters known as Yahoo Boys.

He highlighted that the new cybercrime research center would equip anti-corruption agents with advanced technological tools and techniques to detect and prevent cybercrimes.

“The state-of-the-art center, to be built at the EFCC academy, will focus on seven key areas: advanced fraud detection and prevention, collaborative research and policy development, youth empowerment and capacity building, technological advancement, and resource enablement,” Agboola stated.

The establishment of the cybercrime research hub is a proactive step to address the rampant internet fraud that threatens the stability and trust in Nigeria’s financial systems.

The collaboration aims to enhance the capabilities of EFCC operatives in preventing, detecting, and prosecuting financial crimes.

Ola Olukoyede, the EFCC Chair, praised the initiative as a significant leap forward in the fight against financial crimes.

“The cybercrime research center will significantly enhance our capabilities to prevent, detect, and prosecute financial crimes,” Olukoyede remarked. “The EFCC is impressed with Flutterwave’s strides across Africa, and this partnership marks a crucial step towards ensuring a secure financial landscape for Nigerians.”

The partnership between Flutterwave and the EFCC signifies a robust commitment to cybersecurity, aiming to create a safer and more secure financial environment in Nigeria.

This initiative not only addresses immediate financial threats but also aims to build a resilient framework to combat future cybercrimes effectively.

With the launch of the cybercrime research hub, Flutterwave and the EFCC are set to lead the charge against financial fraud, ensuring that the Nigerian financial sector remains secure and trustworthy for all stakeholders.

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Visa and Mastercard Face Setback as Judge Indicates Likely Rejection of $30 Billion Deal

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Visa Inc. and Mastercard Inc. are facing a potential setback as a federal judge in Brooklyn indicated she is likely to reject their $30 billion settlement with retailers.

The deal, aimed at capping credit-card swipe fees, has been a focal point of contention between the card giants and merchants for years.

Judge Margo Brodie of the U.S. District Court for the Eastern District of New York expressed skepticism about the settlement during a hearing on Thursday.

According to court records, Judge Brodie suggested she might not approve the agreement, stating she would issue a written decision in the coming days.

Retailers have long campaigned to reduce their share of the costs associated with accepting card payments, known as interchange fees.

These fees, which are partially passed on to banks that issue the cards, including major institutions like JPMorgan Chase & Co. and Citigroup Inc., have been a burden for many merchants.

Announced in March and pending court approval, the settlement was designed to allow merchants to charge consumers extra for transactions involving Visa or Mastercard credit cards.

The agreement also aimed to introduce pricing tactics to steer consumers towards lower-cost cards.

“The court’s comments strongly suggest that she won’t accept the settlement,” noted Justin Teresi, an analyst with Bloomberg Intelligence. “While Judge Brodie doesn’t seem convinced that larger retailers should be allowed to opt out from the settlement, provisions like changes to digital wallet acceptance rules and some state bans on surcharges likely present real adequacy issues.”

Both Visa and Mastercard expressed disappointment over the developments. A Mastercard representative stated, “We believe the settlement presented a fair resolution of this long-standing dispute, most notably by giving business owners more flexibility in how they manage their card acceptance activities. We will pursue our options to ensure a proper resolution of this matter.”

Visa’s spokesperson echoed this sentiment, emphasizing that “continued engagement between industry and the merchants is the best way forward.”

Swipe fees have become a substantial financial issue for retailers, totaling more than $160 billion last year, according to the Merchants Payments Coalition. Reactions to the settlement were mixed when it was announced, with some retail coalitions pledging a thorough review and others quickly opposing it.

The Retail Industry Leaders Association, representing large merchants such as Target Corp. and Home Depot Inc., described the settlement as a “mere drop in the bucket” and urged careful review to assess if it adequately addresses the harm inflicted on retailers.

Doug Kantor, general counsel for the National Association of Convenience Stores, praised the judge’s remarks, stating, “We’re gratified to see that the court recognized how bad this settlement was.”

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Norwegian Watchdog Slams Meta for Cumbersome Opt-Out Process in AI Training Plans

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Meta Platforms Inc., the parent company of Facebook and Instagram, is facing a new legal challenge in Norway over its plans to utilize user images and posts to train artificial intelligence (AI) models.

The Norwegian Consumer Council has lodged a complaint, criticizing Meta’s cumbersome and deceptive opt-out process, which it argues breaches stringent EU data protection regulations.

The Council’s statement on Thursday highlighted that Meta’s method for allowing users to opt out of data collection for AI training is overly complicated and intentionally confusing.

“The process to opt-out breaches strict EU data protection rules and has been made deliberately cumbersome by using deceptive design patterns and vague wording,” the Council said.

This isn’t Meta’s first run-in with European regulators regarding data privacy. The tech giant has previously faced multiple complaints for allegedly failing to obtain proper consent from users before collecting their data to target advertisements.

Also, the European Union’s top court has warned Meta about safeguarding public information on users’ sexual orientation from being used for personalized advertising.

“We are urging the Data Protection Authority to assess the legality of Meta’s practices and to ensure that the company is operating in compliance with the law,” stated Inger Lise Blyverket, head of the Norwegian Consumer Council.

The complaint was prepared by the European Center for Digital Rights and will be submitted to the Norwegian Data Protection Authority, as well as other European data protection authorities.

Due to Meta’s EU base in Dublin, the Irish Data Protection Commission will serve as the lead authority in this matter.

The outcome of this complaint could have significant implications for how Meta, and other tech companies, handle user data within the EU.

Meta’s use of user data for training AI has raised significant privacy concerns. Critics argue that without clear and straightforward consent mechanisms, users are often unaware of how their data is being used.

This latest complaint underscores the ongoing tension between big tech companies and European regulators striving to enforce robust privacy standards.

The Norwegian Consumer Council’s action reflects a growing impatience with tech giants’ data practices, emphasizing the need for transparency and user control.

As AI technologies continue to advance, ensuring ethical and lawful data usage remains a critical challenge for both companies and regulators.

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