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Stakeholders Chart Path for MVNOs in Nigeria

MVNOs in Nigeria

L-r: Adeyemi Adepetun, deputy business editor/ICT Editor, Guardian Nigeria; Usman Mamman, director of Licensing and Authorisation representing Dr Aminu Maida, the Executive Vice-Chairman, Nigerian Communications Commission (NCC); Mr Tony Emoekpere, the President, Association of Telecommunications Companies of Nigeria (ATCON); Bukola Olanrewaju, Convener, Telecom Sector Sustainability Forum and Managing Editor, Business Remarks; Mr Chidi Ajuzie, Director, USK Mobile; Mr Teniola Olusola, Director, Strategic Business Initiative, ipNX and Dr Tola Yusuf, Co-Founder and Executive Director, Infratel Africa.

A decisive call for collaboration, strategic market positioning, and patient capital has been issued by key players in Nigeria’s telecommunications sector to unlock the dormant potential of Mobile Virtual Network Operators (MVNOs).

The resolution emerged from the sixth edition of the Telecoms Sector Sustainability Forum (TSSF) organised by Business Remarks at Ikeja, Lagos State, where stakeholders convened under the theme: Unlocking Nigeria’s MVNO Potential: Status, Trends, Investment, and Future Prospects.

The forum, which brought together major mobile network operators (MNOs), the Nigerian Communications Commission (NCC), and licensed MVNOs, served as a candid platform to diagnose the critical challenges stifling the growth of the MVNO sub-sector.

The forum stressed that the sustainability of MVNOs in Nigeria is a collective responsibility.

It called for unwavering collaboration between MNOs, the NCC, and the MVNOs to replicate the success stories seen in other nations, ultimately fostering a more diverse, competitive, and inclusive telecommunications market for all Nigerians.

In his keynote address, Dr. Aminu Maida, the executive vice chairman of the Nigerian Communication Commission, NCC, said the entrance of MVNOs is expected to provide competitive niche offerings as well as enhance digital communications ecosystem in Nigeria for the benefit of the subscribers and the Nigerian economy.

Ably represented by Mr Usman Mamman, the director of Licensing and Authorisation, NCC noted that there are now over 1000 MVNOs globally, with more than 500 operating in Europe alone and 46 MVNO Licenses were issued in Nigeria by the regulator in the year 2023.

Addressing stakeholders, Maida stated that the Commission is not oblivion to the challenges faced by MVNOs in Nigeria, particularly in relation to commercial negotiations. He therefore pledged that NCC is working assiduously with Mobile Network Operators (MNOs) to improve network capacity.

Furthermore, NCC’s EVC encouraged MNOs to partner with MVNOs to target new verticals, drive margin growth as well as to monetize spare capacity, while urging MVNOs players to recognise the viability of the Nigerian market, invest boldly, and position themselves to reap the long-term benefits of their investments.

In his speech, the President of the Association of Telecommunications Companies of Nigeria (ATCON), Mr Tony Izuagbe Emoekpere, dissuaded MVNO Licensees from blindly adopting foreign MVNOs model for Nigerian local market and consumers. He urged players to conduct diligent market analysis and focus on service differentiation through specialized offerings. “MVNOs need to carve a unique niche specially designed for the Nigerian market,” Emoekpere said.

Speaking on this, Dr Tola Yusuf, the co-founder and executive director, Infratel Africa, stressed that MVNOs in Nigeria’s market must adopt a more strategic approach to succeed in rural and underserved areas.

Categorically noting that there are immense potential in connecting these rural communities, Yusuf argued that MVNOs often focus on urban, high-density areas like Lagos, neglecting the vast majority of the population, estimated at over 25 million people who remain completely unconnected.

“The true winners in the MVNO space will be those who develop a clear strategy to serve these markets, even if it requires significant logistical effort, such as using horses or boats to reach remote communities,” he said.

He also suggested that the current market might see future mergers and acquisitions, with some license holders potentially selling their licenses as they fail to compete effectively.

Citing examples of banks with MVNOs licenses in other climes, NCC’s Director of Licensing and Authorisation, Mr Usman Mamman during the panel session draws attention to how financial institutions have successfully entered the telecom space by understanding its customers’ needs and tailoring holistic lifestyle services accordingly.

While addressing the need to focus on providing niche services to specific customer groups, Mamman noted that unlike large mobile network operators, MVNOs are expected to be digital-first and flexible, which enables them to be innovative and quickly capitalize on underserved market segments.

On his part, Dr Chidi Ajuzie, the director USK Mobile, called attention to the capacity constraints by the host MNOs and the revenue- sharing model that can limit profitability. Ajuzie

According to him, “Tier 5 MVNOs are expected to build their own core infrastructure and billing systems (BSS/OSS), but they still rely on the MNO’s radio access network. This creates a bottleneck. Even if a Tier 5 MVNO has excellent billing systems, it can’t offer unlimited data or guaranteed high speeds if the MNO’s network is already at capacity,” he stated.

Ajuzie, however, said some higher-tier are now looking for innovative ways to go beyond the constraint by securing acquiring additional licenses, such as Internet Service Provider (ISP) or Public Licence (PL) licenses.

He also emphasized the

need for a significant expansion of the existing infrastructure, particularly by MVNOs who are now integrating their own fixed infrastructure, such as fiber networks. This expansion, he says, is the only way to “expand the pipe” and create a truly competitive and viable market for all players.

Also speaking Mr Olusola Teniola, ipNX director of Startegic Business Initiative, argued that the nation’s 40,000 telecom towers are grossly insufficient for a population of over 200 million, especially when compared to the United Kingdom’s 75,000 towers for a much smaller population.

He stated that unlike developed nations where public funds initially built a robust telecom backbone, Nigeria’s infrastructure was financed by a few dominant mobile network operators (MNOs) who have invested billions.

Teniola posited that the lack of widespread infrastructure, particularly outside major cities like Lagos, Abuja, and Port Harcourt, presents a major challenge for new MVNOs, which were intended to serve the millions of unconnected Nigerians, particularly in rural areas.

He also warned that without substantial new investment to expand the network, the MVNO business model will struggle to succeed, with only those that can survive a long-term, 7-to-10-year investment cycle likely to see a return on their capital.

In her welcome address, Bukola Olanrewaju, the convener who also doubles as the Managing Editor of Business Remarks, said the Nigerian telecom market is growing at an incredible pace and the level of success recorded in each country with MVNOs is largely dependent on the regulatory enforcement and interventions, wholesale agreement, spectrum access, and on how effectively MVNOs players  can navigate these hurdles.

“To succeed, Nigeria must collectively build an ecosystem that is both competitive and sustainable,” Olanrewaju remarked as she brought into focus MVNOs operations in South Africa, Thailand and Argentina.

The forum, TSSF 6.0, stressed that the sustainability of MVNOs in Nigeria is a collective responsibility.

It called for unwavering collaboration between MNOs, the NCC, and the MVNOs themselves to replicate the success stories seen in other nations, ultimately fostering a more diverse, competitive, and inclusive telecommunications market for all Nigerians.

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Tags: MVNOs NigeriaTSSF 6.0
Peter Oluka

Peter Oluka

Peter Oluka (@peterolukai), editor of Techeconomy, is a multi-award winner practicing Journalist. Peter’s media practice cuts across Media Relations | Marketing| Advertising, other Communications interests. Contact: peter.oluka@techeconomy.ng

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