NCC Licences 25 New Mobile Virtual Network Providers

The Nigerian Communications Commission (NCC) has granted licences to 25 new firms to provide mobile telecommunications services under the framework of the Mobile Virtual Network Operator (MVNO).

These firms will offer the same services as MTN, Globacom, Airtel, and 9mobile but on the same infrastructure that the previous carriers constructed.

The MNVO's entry is intended to bring competitive options in the telecommunications sector and cut subscribers' call and data expenses.  

Aside from decreasing the cost of access to telecom services, the NCC stated that the MVNOs will boost the government's attempts to extend telecom services to more rural, underserved, and unserved regions around the country. 

According to industry analysts, MVNOs may quickly climb in the market by purchasing network capacity from Mobile Network Operators (MNOs) and implementing a business model that transfers these savings onto the user.

They also stated that MVNOs can provide a more tailored-made service than MNOs, which tend to provide a more general service that caters to the public. 

Routelink Integrated Systems Ltd; Hazon Technologies Limited; Asel Telecom Nigeria Limited; Briclinks Africa Plc; Pisi Mobile Services Limited; Univasa Nigeria Limited; and Imose Technologies Limited are among the seven businesses licenced in the tier 2 category, according to the NCC database. 

Amics Technologies Limited, Zegtel Limited, Telewyz Limited, Siu Telecommunications Network, Abrindex Nigeria Limited, Metropolitan Consortium Nigeria Ltd, and IPNX Nigeria Limited are among the seven companies licenced in Tier 3.

Imbil Telecoms Solutions Nig. Ltd., Environmental Expressions Limited, and DMK Telecommunication Nig. Ltd. are among those licenced as Tier 4 operators. 

Eight enterprises were licenced in the tier 5 category. Systegra Technologies Limited, Choffan Communications Limited, Mab Consultant and Associates Ltd, H & Y Business Global Limited, Taima Technologies Ltd, Global Communication Extension Services Ltd, USKS Ventures International Ltd, and Paribas Communication Limited are among those involved. 

The telecom regulator collected N5.9 billion in licencing fees for the government through the issue of the MNVO licence to the 25 enterprises.

The 10-year tenured MNVO licences are priced differently according to the NCC framework.  

Tier 5 licences are the most expensive, costing N500 million, while Tier 4 licences are N200 million.

Tier 3 and Tier 4 licences would cost N130 million and N60 million, respectively, while Tier 1 licences will cost N35 million.

Speaking at a recent forum, Prof. Umar Danbatta, Executive Vice Chairman of the NCC, stated that the commission, through the MVNO, would create an enabling environment in which various players provide diverse services based on licences issued by the commission in accordance with the Nigerian Communications Act (NCA 2003), Licencing Regulation 2019, and other subsidiary regulations. 

"In its efforts to foster an enabling environment, the Commission has introduced an MVNOs licence, which will generate employment and bridge the gap between society's unserved and underserved." It will also increase competition and provide telecom customers with more options, according to Danbatta. 

Danbatta explained the differences between the five licencing categories:  

“Tier1 is a virtual operator, which relies totally on hosts facilities with restricted tariff control; Tier 2 is sample facilities operator, which owns an intelligent network, and has loose tariff control; Tier 3 is care facilities operator which can negotiate to interconnect agreements, has major tariff control; Tier 4 is a virtual aggregator/enabler, which performs aggregation and enabling but only operates in unserved regions and Tier 5 is the Unified Virtual Operator, which has the freedom to operate in the whole segments/tiers.”  

According to Danbatta, the Nigerian market has a high need for differentiated services, with several gaps in numerous sectors, particularly mobile to fixed market, M2M, B2B, and rural networks. 

While urging for greater industry collaboration, the NCC EVC stated that the rising worry about over-the-top (OTT) providers eating into operator ARPU provides an excellent opportunity for MVNOs to work with these players, diverting some money back to the MVNOs through wholesale agreements. 

Based on past experience, particularly from wealthy nations, the MVNO programme has the potential to assist Nigeria in further bridging the country's access gaps.

Existing data from the Nigerian NCC revealed 114 access gaps, with around 25 million individuals still lacking basic telephony connectivity.

However, the MVNO plan, together with other advances, is projected to dramatically close the gap. 

MTN, Globacom, Airtel, and 9mobile, Nigeria's telecommunications MNOs, have connected 323.6 million telephone lines, of which 226.8 million were active, as of February 2023.

In the same month, internet subscriptions through narrowband were at 156.9 million, while broadband penetration was 48.49%, with 92.5 million Nigerians connected to high-speed internet. 

The entry of MVNOs is likely to enhance these statistics even further as they expand services to places not served by MNOs while also providing specialised services to customers in already connected areas.  

A Mobile Virtual Network Operator (MVNO) is a telecommunications product and service provider that uses the infrastructure capacity of a fully licenced mobile telecoms service provider or mobile network operator (MNO).

This implies that the operators will not need to invest in infrastructure and would instead rely on existing facilities around the country to supply services. 

According to Fortune Business Insights, the global MVNO market is expected to grow from $67.54 billion in 2020 to $123.40 billion in 2028, at a CAGR of 7.9% between 2021 and 2028. 

There were 943 MVNOs and 255 MNO sub-brands active internationally as of June 2014.

This takes the total number of MNO-hosted mobile service providers to over 1,200, up from 1,036 in 2012. 

According to GSMA Intelligence, the number of MVNOs globally rose by 70% between June 2010 and June 2015, reaching 1,017 in June 2015.

As of December 2018, there were 1,300 active MVNOs operating in 79 countries, representing more than 220 million mobile connections—roughly 2.46% of the world's total 8.9 billion mobile connections.  

The eight nations with the most active MVNOs are the United States with 139 (4.7% market share), Germany with 135 (19.5%), Japan with 83 (10.6%), the United Kingdom with 77 (15.9%), Australia with 66 (13.1%), Spain with 63 (11.5%), France with 53 (11.2%), and Denmark with 49 (34.6%).