Amidst the ongoing business uncertainty in Nigeria’s telecommunications sector, 43 companies have collectively invested a staggering N8.6 billion to secure Mobile Virtual Network Operator (MVNO) licenses from the Nigerian Communications Commission (NCC).
MVNOs, as per their default operations, are poised to offer telecommunication services in areas that are currently unserved or underserved, leveraging the existing infrastructure of major mobile network operators (MNOs) such as MTN, Airtel, Globacom, and 9mobile.
However, even as these new entrants prepare to penetrate the market, they face daunting challenges. The incumbent MNOs already hold a dominant position in the market, with a combined total of 224.4 million active subscriptions as of December 2023, according to data from the NCC. This market saturation, coupled with the ongoing enforcement of the NIN-SIM linkage ban, poses potential hurdles for new MVNOs in acquiring customers.
Despite the potential for growth in underserved areas, concerns persist regarding the capacity of MNOs to support the MVNOs’ operations. Current forex challenges have hampered the ability of MNOs to invest further in infrastructure, with industry leader MTN Nigeria citing currency devaluation as a significant factor affecting its investment capacity.
The MVNO framework released by the NCC outlines five categories of operators, ranging from tier 1 to tier 5. The licensing fees vary accordingly, with the highest tier 5 license priced at N500 million, followed by tier 4 at N200 million, tier 3 at N130 million, tier 2 at N60 million, and tier 1 at N35 million.
In light of these challenges, industry experts emphasize the importance of MVNOs offering unique Value-Added Services (VAS) to differentiate themselves from the existing MNOs. This strategy, they believe, will be crucial for the success of MVNOs in Nigeria’s competitive telecommunications landscape.