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The Nigerian Communications Commission (NCC) has a primary mandate to foster competition among industry operators and ensure the delivery of quality and efficient telecommunications services across Nigeria. Despite these efforts, the telecommunications market remains dominated by four major operators—MTN, Airtel, Glo, and 9Mobile—serving over 200 million Nigerians. This dominance has left 114 access gaps, with an estimated 25 million people still without basic telephony services, according to NCC data.
Furthermore, the Nigerian National Broadband Plan 2020–2025 reveals that 31.16 million Nigerians live in areas without any telecommunications coverage. These unserved areas have become breeding grounds for criminal activities, with insecurity persisting due to the absence of connectivity.
To bridge this gap, the NCC, on August 11, 2022, announced the introduction of Mobile Virtual Network Operators (MVNOs) licenses. This initiative was intended to improve telecom services, expand mobile coverage, and bring quality communication services to underserved and unserved communities. The commission also unveiled a License Framework for the establishment of MVNOs in Nigeria.
The MVNO Framework
MVNOs are wireless communication service providers that purchase mobile network services wholesale from Mobile Network Operators (MNOs)—such as MTN, Airtel, Glo, and 9Mobile—and resell them at discounted rates to end users. Under the Nigerian Communications Act (NCA 2003) and Licensing Regulation 2019, the NCC has created an enabling environment for MVNOs to operate and provide diverse services.
“The MVNO license will generate employment, bridge the gap between unserved and underserved communities, foster competition, and provide consumers with more choices,” the NCC stated.
As of now, the NCC has licensed 43 companies as MVNOs, with the expectation that they would begin rolling out services within a year of obtaining their licenses. These MVNOs will use the existing infrastructure of MNOs to deliver competitive services and reduce call and data rates, particularly in rural areas.
Challenges in Rolling Out Services
More than 10 months since the issuance of licenses, none of the MVNOs have made significant progress in penetrating the global MVNO market, which was valued at $67.54 billion in 2020 and is projected to reach $123.40 billion by 2028.
MVNOs in Nigeria have cited several challenges impeding their rollout, including profitability concerns, limited pricing flexibility, innovation constraints, and balancing competitiveness with sustainability.
Globally, MVNOs are growing, with 943 operators and 255 sub-brands active as of 2014. According to Fortune Business Insights, the global MVNO market is expected to grow at a compound annual growth rate (CAGR) of 7.9% between 2021 and 2028. Despite this growth, Africa accounts for only 2% of the global MVNO market, highlighting the need for accelerated development in the region.
Proposed Solutions
Industry experts have emphasized the importance of innovation and collaboration in overcoming these challenges.
- Value-Added Services (VAS): Satya Mekala, CEO of Wireless Technology Labs, urged MVNOs to focus on VAS tailored to sectors like education, agriculture, and rural development, rather than competing directly with MNOs.
- Market Differentiation: Himmat Gill, Vice President of TecnoTree, stressed the need for MVNOs to create niche markets, enhance customer experience, and forge strategic partnerships to stand out.
- eSIM Technology: Rune Holbeck, CEO of Nordic eSIM, advised MVNOs to adopt eSIM technology, which eliminates the need for physical SIM cards, enhances security, and enables rapid market entry.
- Fraud Prevention: Elmehdi Erroussafi, LATRO’s Director of Solution Architecture, emphasized the importance of advanced fraud detection and revenue assurance systems to protect MVNOs from financial losses.
NCC’s Response
The NCC acknowledged that MVNOs are still in their early stages in Nigeria. “We have issued licenses to MVNOs, and as they begin to implement their plans, we expect more collaboration with MNOs and more choices for consumers. Anything new takes time, and we expect teething issues. However, progress is anticipated in the coming years,” the commission noted.
The NCC reaffirmed its commitment to stabilizing growth in the ICT sector, emphasizing that MVNOs play a critical role in extending digital services to underserved and unserved communities.
Conclusion
For MVNOs to succeed in Nigeria, they must embrace innovation, focus on niche markets, and foster strategic partnerships. By leveraging modern technologies like eSIM and offering tailored solutions, MVNOs can overcome challenges, boost profitability, and contribute to closing the communication gap for millions of Nigerians.
