Submission of a Project Feasibility Report (PFR) is one of the essential requirements for the procurement of an individual telecommunications license from the Nigerian Communications Commission (NCC).2 However, the preparation of this report is often viewed as an onerous task by prospective applicants seeking to obtain a telecoms licence, primarily because they do not have the requisite knowledge and skill to prepare a report of this nature.3 The resultant effect of this challenge is the creation of poorly drafted PFRs that are subjected to rigorous scrutiny by NCC, sometimes leading to a delay in the issuance of the desired telecommunications licence. In this article, we have identified some of the fundamental contents of a PFR to guide companies desirous of preparing a PFR to obtain a telecommunications licence seamlessly.
Essential Contents of a Project Feasibility Report
- Business and Market Analysis
Every PFR of a telecommunications company should contain an analysis of the market the company plans to enter, relative to its proposed telecommunications undertaking.4 This implies that the analysis would include a thorough assessment of the market in the specific industry the company wants to penetrate, the current gaps or lapses in the market which the company intends to cover, its competitive analysis, its target market and the unique characteristics of its services.5 A proper market analysis can help a company minimize risk and maximize profit by directing its attention to underserved areas or areas in dire need of its products.6
- Detailed Description of the Proposed Telecommunications Service
It is important for the PFR of a prospective telecommunications licensee to contain a comprehensive description of all the services a company intends to provide and the medium through which it desires to provide such services.7 For instance, if the company is desirous of procuring an internet service license, its PFR should contain the different kinds of internet connectivity services that it wants to provide in Nigeria and how it plans to achieve this.
- Technical layout/systems description
This is an essential part of every PFR. Here, a detailed description is given about the architecture of the company's networks and systems.8 Usually, this might be put into graphical representations to provide the regulators with a picture of how the layout of the company's network architecture would appear. However, consideration needs to be given to the kind of system the company plans to adopt based on its proposed services. For example, a company that plans to rollout internet services would have a different technical layout from a company that wants to construct and operate access tandems and fibre optic transmission facilities.
- Frequency requirements
Based on the nature of services of a telecommunications company, the frequency requirements may vary. Thus, whatever frequency the company intends to utilise has to be clearly stated in its PFR. If the company desires to operate on an unlicensed frequency or license exempt spectrum, it should indicate this in its PFR and ensure that its equipment does not cause an interference with that of other licensed users.9 However, if the company desires to operate on a licensed frequency spectrum, such frequency is expected to conform to the general allocation of frequencies in the International Telecommunications Union (ITU) Regulations and approved frequency assignments by NCC.10
- Metering and Billing System
During the preparation of a PFR, the kind of metering and charging structure a telecommunications company plans to adopt should be ascertained and included. The PFR should cover the proposed customer charging, billing, collection and credit practices.11
- Proposed Grade of Service
The proposed grade of telecommunications services a company intends to roll out is required to be stated in its PFR.12 This service quality must be in conformity with the minimum standards prescribed by NCC.13 A prospective licensee is expected to also provide information on the service quality levels it desires to offer, the waiting time for initial connection and any service areas and coverage maps, if applicable.14
- Proposed Consumer Code of Practice/Compensation for loss of service
This is a vital consideration during the preparation of a PFR for a telecommunication company, because it entails the company's proposed practices regarding its relation with its consumers. Every telecommunications company is required to prepare and submit its proposed code of practice or compensation for loss of service to NCC during its application for a telecommunications licence.15 This requirement is premised on the importance of consumer protection as stipulated in the Nigerian Communications Act.16 In addition, the conditions of most telecommunications licenses, require the following to be included in a Company's Code of Practice, amongst other provisions:17
- Guidance to customers and employees in respect of disputes or complaints relating to the provision of services by the Company;18
- Advice to customers on charging, billing and enquiries in relation thereof; and
- Advice and procedures on the proper use of its service by such customers in consonance with NCC's Guidelines on Quality of Service.19
- Implementation Schedule and Growth Plan
The PFR of a telecommunications company is expected to contain an implementation roadmap and growth plan.20 This plan should capture the company's implementation strategies following the issuance of its license and the projected plan for its growth on a yearly basis.21 The implementation roadmap could include the company's plan towards securing a type approval of all its equipment, where necessary, and carrying out installations of its equipment at various points, its employment of experienced technical experts to operate its equipment, establishment of a 24-hour customer support center etc.22
- Location & Coverage of service
The PFR of a communications company should contain where the company is going to be situated in Nigeria and the proposed coverage of its services.23 If the company desires a national coverage or the restriction of its coverage to a particular state(s) in the country, this should be stated explicitly in the PFR.
- Proposed Community Service Obligation
Since a telecommunications company would derive benefits from a community following the deployment of its services in the community, it is expected to state its proposed plans to invest or give back to the community in line with its Corporate Social Responsibility (CSR) objectives.24 These actions may be in form of empowerment programs, scholarship programs, educational initiatives, skill acquisition programs as few examples.
- Ownership, Organisation and Management Structure
This part of the PFR describes the ownership and management structure of a company seeking a telecommunications licence, including its staffing and capacity building plans.25 An organogram can be drawn to portray the internal management structure of the company, alongside an indication of the roles of each member of management in the company. Thus, it is important for the company to employ persons with the requisite level of expertise and skill relevant to the kind of services provided by the company to manage its affairs effectively.
- Financial Projections
The PFR is also required to contain projections on a company's financial status following the issuance of its communications license. These forecasts are expected to include the company's fundamental assumptions, tariff structure, profit & loss accounts, cash-flow statements over the licence period, as well as the company's project financing arrangements.26
A Project Feasibility Report is an essential annexure to a telecommunications licence application. It is a compulsory requirement that all companies seeking to obtain a communications licence must comply with before its licence application can be approved by the Nigerian Communications Commission.27 The PFR does not only help the Commission review a company's capability to provide the services within the scope of a communications licence, it also helps a company ascertain its level of readiness for the provision of its desired services under a licence. However, due to the level of detail and the technical nature of a good PFR, some telecommunication companies encounter challenges during its preparation, resulting in a delay in the procurement of its desired telecoms licence.28 It is thereby recommended that telecommunication companies faced with this challenge, should engage the services of professionals with the requisite expertise and skill required to prepare a well drafted PFR.
* Sandra Eke, Associate, Intellectual Property & Technology Department, SPA Ajibade & Co., Lagos, Nigeria.
2. NCC, "Application for Individual License" available at: https://ncc.gov.ng/docman-main/licensing-application-forms/881-individual-license-application-form-4/file accessed 20th March 2023.
3 AMC Consultants, "Why feasibility studies fail" available at: https://www.amcconsultants.com/experience/why-feasibility-studies-fail accessed 31st, March 2023.
5. BPlans, "How to Write a Market Analysis" available at: https://articles.bplans.com/how-to-write-a-market-analysis/ accessed 27th March 2023.
7. NCC, "Application for Individual License" available at: https://ncc.gov.ng/docman-main/licensing-application-forms/881-individual-license-application-form-4/file accessed 20th March 2023.
9. S.17(b) Type Approval Regulations 2008, Gazette No. 67, Vol.95.
10. See Condition 26 Frequency Spectrum Licence.
11. See S.106 (3)(e) Nigeria Communications Act (NCA) Cap N7, LFN 2004.
12. NCC, "Application for Individual License" available at: https://ncc.gov.ng/docman-main/licensing-application-forms/881-individual-license-application-form-4/file accessed 20th March 2023.
13. See S.104 (a)
14. See Art.8(2) General Consumer Code of Practice Regulations 2007, Gazette No. 87, Vol.94.
15. NCC, "Application for Individual License" available at: https://ncc.gov.ng/docman-main/licensing-application-forms/881-individual-license-application-form-4/file accessed 20th March 2023
16. See S.106(3) NCA.
17. See Condition 7 of the Metropolitan Cable (Fibre) Network Licence and Interconnect Exchange Licence,
Condition 6 of the Internet Service Provider Licence etc.
20. NCC, "Application for Individual License" available at: https://ncc.gov.ng/docman-main/licensing-application-forms/881-individual-license-application-form-4/file accessed 30th March 2023
22. After the issuance of a communications licence, an equipment holder is required to obtain authorization from NCC to use or operate any communications equipment in Nigeria. See Art. 9(1) Type Approval Regulations 2008, Gazette No. 67, Volume 95.
23. NCC, "Application for Individual License" available at: https://ncc.gov.ng/docman-main/licensing application-forms/881-individual-license-application-form-4/file accessed 30th March 2023.
28. AMC Consultants, "Why feasibility studies fail" available at: https://www.amcconsultants.com/experience/why-feasibility-studies-fail accessed 31st, March 2023.
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