The proposed framework is designed to address longstanding concerns around market access, pricing transparency, and operational bottlenecks that could hinder the growth of smaller operators and virtual network providers.

As part of its consultative rulemaking process, the NCC has invited industry stakeholders, telecom operators, investors, and other interested parties to submit comments on the draft framework by June 29, 2026.

A public consultation forum has also been scheduled for July 9, 2026, where feedback received from stakeholders will be reviewed before the rules are finalized.

Protecting Competition in the MVNO Market

At the heart of the proposed regulations is the Commission’s effort to prevent dominant Mobile Network Operators (MNOs) from engaging in anti-competitive practices that could disadvantage emerging MVNOs.

The NCC noted that the framework seeks to ensure fair access to network infrastructure while promoting healthy competition, innovation, and investment across the telecom ecosystem.

Industry observers believe the move could accelerate the growth of Nigeria’s nascent MVNO market by reducing entry barriers and creating clearer operating guidelines for both host operators and virtual network providers.

Faster Onboarding, Reduced Delays

One of the key highlights of the draft rules is the introduction of strict timelines for onboarding and interconnection processes.

Under the proposed framework, host network operators will be required to acknowledge MVNO connection requests within 10 days and provide technical readiness assessments within 20 days.

The regulations further stipulate that all commercial and technical agreements between parties must be concluded within 120 days, a provision aimed at preventing prolonged negotiations and unnecessary delays that could slow market entry.

New Pricing Framework

To address concerns around pricing discrimination, the NCC has proposed benchmark pricing structures covering data services, voice calls, SMS, and USSD offerings.

The Commission believes the measure will help prevent larger operators from leveraging their market power to squeeze out smaller competitors through predatory pricing or unfavorable wholesale terms.

The pricing framework is expected to improve transparency and provide MVNOs with greater certainty when designing products and services for consumers.

Clearer Operational Structure

The draft regulations also introduce a tiered operational model that clearly defines the roles, responsibilities, and service boundaries of different categories of MVNOs.

The framework outlines compliance obligations, revenue-sharing arrangements, and service delivery requirements, providing a clearer roadmap for operators seeking to participate in Nigeria’s evolving virtual network market.

Strengthening Nigeria’s Telecom Ecosystem

The NCC said the proposed rules are intended to encourage innovation, expand consumer choice, and stimulate investment within the telecommunications industry.

With Nigeria seeking to deepen broadband penetration and accelerate digital inclusion, analysts say a well-regulated MVNO ecosystem could help drive service innovation, improve competition, and extend connectivity to underserved segments of the market.

If adopted, the framework would mark one of the most comprehensive regulatory interventions aimed at supporting the development of the country’s emerging MVNO segment while ensuring fair competition among telecom operators.

This milestone represents a significant step forward in the ongoing evolution of Nigeria’s telecommunications landscape.

Following this partnership, IMBIL Telecom has successfully onboarded five Mobile Virtual Network Operators (MVNOs), with several additional operators currently in advanced stages of technical and commercial integration and expected to commence operations in the coming months.

This progress underscores IMBIL’s position as a key enabler of innovation, competition, and market expansion within the Nigerian telecom sector.

Speaking on the achievement, Akeem Ogunkoya, chairman and chief executive officer of IMBIL Telecom, noted:

“As the pioneer MVNE in the Nigerian telecom market, our mission is to lower the barrier to entry for aspiring telecom operators. Our partnership with Airtel Nigeria provides a solid foundation for MVNOs to thrive by leveraging world‑class infrastructure and scalable technology. We are proud to have onboarded five MVNOs already and are encouraged by the strong pipeline of operators preparing to enter the market.”

He further acknowledged the role of the Nigerian Communications Commission (NCC) in creating a forward‑looking regulatory environment that continues to support MVNO growth, innovation, and fair competition across the industry.

IMBIL Telecom’s MVNE platform delivers comprehensive, end‑to‑end capabilities, including core network services, provisioning, billing systems, regulatory compliance support, and a wide range of value‑added services.

This integrated approach allows MVNOs to focus on customer acquisition, brand development, and service innovation while relying on a robust and scalable backend infrastructure.

As demand for affordable, flexible, and customer‑centric telecom services continues to grow, IMBIL Telecom remains committed to empowering startups, entrepreneurs, and established enterprises seeking to enter or expand within the telecom space.

Through adaptable commercial frameworks, advanced technology, and dedicated operational support, the company continues to promote inclusivity and digital access across Nigeria.

The collaboration with Airtel Nigeria reflects a shared vision to deepen market penetration, enhance digital inclusion, and drive the next phase of telecom innovation nationwide.

Historically, Cell C has been the primary enabler of MVNOs in this country, leveraging its own spectrum but also using the physical network infrastructure of MTN and Vodacom through roaming agreements.

But as the MVNO market expands, other mobile network operators (MNOs) like MTN, Vodacom and Telkom have also entered this space, debuting their own MVNO enablement platforms and actively seeking more brands to partner up with.

This makes sense when you consider that the local MVNO market, which had a subscriber base of 3.8 million in 2024, according to a report from Africa Analysis, is expected to more than triple, reaching between 12.3 million and 15.9 million, by 2030.

For MNOs and Mobile Virtual Network Enablers (MVNEs) looking to capitalise on this massive market opportunity, it makes sense to offer potential MVNO partners a plug-and-play package that provides everything needed to launch a mobile network without building the technology from scratch.

Introducing MVNO-in-a-box

An “MVNO-in-a-box” is a pre-packaged, ready-to-deploy solution that brings together all the technology, tools, and operational components needed for a business to start and run an MVNO quickly and cost-effectively.

It’s essentially a turnkey MVNO platform, designed to simplify and speed up market entry.

When you consider that it can take up to two years to launch a traditional MVNO, a plug and play offering that can reduce this to a few months is essential for MNOs and MVNEs looking to sign and activate brands in less time..

So, what’s in the box?

A typical MVNO-in-a-box offering will bundle together all the core capabilities an operator needs, from OSS/BSS systems and integration frameworks to SIM provisioning interfaces and optional value-added services, and make everything available via a simple, self-service portal.

In an ideal scenario, a business wanting to launch an MVNO will be able to visit a web portal, plug in all the necessary details and their mobile network will be live the next day.

This approach makes strong strategic and commercial sense for both MNOs and MVNEs, especially in a market where MVNO competition is increasing. Below are three key benefits of MVNO-in-a-box.

Faster time-to-market

In a competitive landscape, speed is everything. Quite simply, more MVNO launches mean more wholesale revenue for MNOs and more platform fees for MVNEs.

Reduced operational burden for MNOs and MVNEs

Supporting MVNOs normally requires ongoing engineering work – think bespoke integrations, custom billing setups and system testing and provisioning.

With a plug-and-play MVNO platform, everything is standardised so MNOs and MVNEs no longer need to reinvent the wheel every time they onboard a new MVNO.

Lower setup costs, minimised risk

Traditionally, setting up an MVNO can be expensive for everyone involved. By offering things like prebuilt OSS/BSS, reusable APIs and automated provisioning, MVNO-in-a-box dramatically lowers the total cost per MVNO partner.

Additionally, MVNO-in-a-box offerings use proven, repeatable modules, which reduces risk. This makes it more viable for smaller, niche players to enter the market profitably.

An MVNO-in-a-box solution frees up new MVNOs so they don’t have to focus on backend complexity and can rather spend time ​​thinking about how to build their brand and grow their business.

At VAS-X, we want to help operators and brands to launch and run MVNO services without building the full stack themselves.

The goal is to help new entrants monetise connectivity as part of broader digital offerings as quickly and seamlessly as possible.

It’s not surprising therefore, that the question on the lips of many today is whether the Nigerian telecom sector has reached its limit.

Proponents of Mobile Virtual Network Operators (MVNOs) say there’s still room to grow. This was the central focus of the Telecoms Sector Sustainability Forum (TSSF 6.0) in Lagos, themed “Unlocking Nigeria’s Mobile Virtual Network Operators (MVNOs) Potential: Status, Trends, Investment, and Future Prospects.”

With a teledensity of 79.65 per cent and broadband penetration nearing 50 per cent, telecom remains one of Nigeria’s most dynamic sectors, consistently attracting billions in foreign direct investment and driving digital transformation.

Yet, challenges persist, including affordability, rural coverage, and limited service diversity. These are the gaps MVNOs are designed to bridge.

Unlike traditional Mobile Network Operators (MNOs) such as MTN, Airtel, Globacom, and 9mobile, MVNOs lease network capacity and focus on innovation, niche segments, and pricing.

Globally, MVNOs have been game-changers. The global MVNO market size in 2022 was around $78 billion and was expected to grow by gigantic margins by 2030 to over $149 billion.

For Nigeria, the hope is that MVNOs will fuel competition, increase penetration, and open up new opportunities.

Experts insist that success for MVNO depends very much on regulation, partnership, and innovation.

South Africa is the top country in Africa with a regulatory system encouraging differentiated propositions, superior customer experience, and service bundling.

MVNOs in Kenya have evolved from resale to spearhead technology-focused services for a digitally literate population.

Argentina has mandated open networks and infrastructure sharing, which allows new entrants to compete more straightforwardly.

In Thailand, however, the MVNO sector failed because of lax enforcement, as MNOs were able to effectively exclude new entrants despite regulation.

The moral is obvious: MVNOs fail without regulatory enforcement and reasonable wholesale terms.

Since 2023, the Nigeria Communications Commission (NCC) has licensed 46 MVNOs on five levels, ranging from simple resellers to full enablers with greater control. The early entrants have been encouraging.

Vitel Wireless was the first MVNO to be assigned a dedicated numbering range (0712) and achieve full interconnectivity with all the major MNOs. EmoSIM introduced Nigeria’s very first travel eSIM for international travellers.

These are good signs, but issues exist. Some licensees mention a delay in negotiation of the agreement for wholesale and interconnection with major operators, which is hindering rollout. Economic headwinds, primarily FX unification and the removal of fuel subsidies, have also tested new entrants.

However, MNOs have spent over $1 billion investing in network rollout, which leaves the way open for partnership with MVNOs to leverage idle capacity and conquer underserved niches.

The reality check: MVNOs are not just competitors; they are enablers of digital inclusion. They are the new agents of growth. They work by:

Plugging rural gaps: They can provide services to unprofitable segments where MNOs are not willing to invest.

Niche targeting: Whether students or SMEs, migrants or religious minorities, MVNOs are able to create tailored products. 

Low-cost offerings: With rising competition, MVNOs lower prices and extend consumer choice.

Innovating services: MVNOs are best suited to bolt-on mobile money, e-learning, telemedicine, IoT, and gaming solutions.

Spurring investment and employment: They attract new capital, stimulate employment, and build capacity in customer care, network management, and digital solutions.

In a country with one of the world’s youngest and most technologically adopting populations, these opportunities cannot be ignored.

For Nigeria’s MVNO model to take hold, three imperatives become clear:

Regulatory Enforcement: NCC should not only set regulations but also impose wholesale obligations on MNOs. Strict regulation will discourage anti-competitive tendencies. 

Partnership Mindset: MVNOs must be viewed as partners by MNOs. Joint ventures enable them to reach new customer segments, capitalise on spare capacity, and respond to regulatory pressure.

Brand Differentiation: MVNOs must fight hard to build consumer trust and brand recognition in markets controlled by incumbent behemoths. They must survive on unique, sharp value propositions.

The MVNO entry appears like a game-changer for Nigeria’s telecommunications industry. With more than 46 licensees, the potential for extending access, lowering prices, and spurring innovation is immense. Potential does not suffice, however.

Without regulatory power, infrastructure sharing, and genuine partnership, Nigeria will risk replicating Thailand’s mistakes rather than Argentina’s successes.

In a speech at the forum, Bukola Olanrewaju, CEO, Business Remarks, convener of the TSSF 6.0 summit, stated that: “Nigeria can create a place where MVNOs are not only there but thriving, stimulating innovation and delivering the advantages of digital connectivity for all.”

Nigeria faces a clear choice: treat MVNOs as an afterthought or embrace them as catalysts for the next wave of telecom growth. The nation’s response will determine the future of digital inclusion, affordability, and innovation.

*Elvis Eromosele, a corporate communications expert and sustainability activist, authored this through elviseroms@gmail.com..

]]> https://techeconomy.ng/how-mvnos-can-unlock-opportunities-in-nigerias-telecom-amid-challenges/feed/ 0 https://techeconomy.ng/how-telcos-are-unlocking-new-revenue-streams/ https://techeconomy.ng/how-telcos-are-unlocking-new-revenue-streams/#respond Mon, 29 Sep 2025 11:42:11 +0000 https://techeconomy.ng/?p=168324 In the early days, telecom service providers focused primarily on helping people connect by making voice calls. The job was simple: provide customers with voice services.

But over time, this began to evolve. As technologies advanced and consumer needs shifted, telecom operators introduced fixed-line data, SMS, mobile services, and eventually, mobile data; all of which revolutionised how people communicated and accessed information on the go.

And with the rise of smartphones and the internet, telcos were pushing to become more than just connectivity providers. And now, they’re expanding again.

Today, telcos have become platform businesses that provide a curated ecosystem of third-party products and services.

Think of the telcos of old as a single store located in a much bigger shopping mall that offered very niche solutions. But now, they’re in the entire mall, which brings together different sets of products and services into a bundle or package so that it’s easier for customers to get everything they need in one place.

These value-adds enrich the customer experience, deepen engagement and open strategic new revenue streams.

For example, a customer who wants to leverage the speed and reliability of their new fibre line could also subscribe to Netflix or EA Games via their current service provider and get charged for that service on their telecoms bill. Similarly, if an enterprise customer wanted Microsoft 365 memberships for their employees, they can now buy a bundle from an operator and then get billed for their enterprise telecommunications, as well as their Microsoft 365 subscriptions. 

Mobile operators, fibre providers, MVNOs, and others are all incredibly well-positioned to become an on-sell partner and distribute another business’s products and services.

By doing so, brands can instantly access new revenue streams. These service providers already have all the necessary information to send their customers a bill, so they can simply add whatever extras their customers are buying to their bill.

Additionally, these service providers have a wealth of information about their customers that they can use to target customers based on their data usage patterns.

How does it all work? APIs allow these different platforms and applications to communicate and exchange data with each other.

This essentially creates a digital bridge between the operator and third parties, making it possible to effectively and securely distribute a partner’s products and services.

By offering relevant, trusted third-party solutions alongside core connectivity, telcos can evolve into digital ecosystem partners.

Convenient for customers, profitable for service providers, this kind of approach can be the difference between a one-time buyer and a long-term loyal customer.

VAS-X serves as the technology provider and supports telcos with the central API connectivity and billing environment that allows them to offer a plethora of new billable services to their subscribers, opening up revenue streams and driving subscriber lifetime value. 

Effective October 1, 2025, MTN Nigeria will lease 5MHz FDD in the 900MHz band and 15MHz FDD in the 1800MHz band from T2 Mobile for a period of three years.

The lease is a key enabler for MTN’s national roaming agreement with T2 Mobile, allowing the telco to manage increased network traffic from T2’s customers on MTN’s infrastructure.

Karl Toriola, CEO of MTN Nigeria, commented:

“This milestone aligns with our Ambition 2025 strategy and reflects our commitment to delivering reliable, high-quality connectivity to Nigerians. Leveraging additional spectrum resources helps us expand capacity in a cost-efficient and environmentally responsible manner.”

The telco also confirmed that it will not renew its one-year lease agreement with Natcom Development and Investment Ltd (Ntel), which covers spectrum across 17 states. This agreement will expire on November 29, 2025.

MTN Nigeria says this new arrangement underscores its dedication to industry collaboration, infrastructure sharing, and advancing digital inclusion nationwide.

The company recently signed a national roaming deal with T2 Mobile and continues onboarding Mobile Virtual Network Operators (MVNOs) to deepen competition and accelerate broadband penetration.

MTN Nigeria remains one of Africa’s largest telecom operators, connecting more than 84 million subscribers across Nigeria.

The company reiterated its focus on investing in infrastructure and partnerships that will support the country’s digital transformation and inclusive economic growth.

As major telcos jostle for dominance, the role of mobile virtual networks has been largely overlooked – and yet they hold the key to increasing competition and bridging the connectivity gap for underserved communities.

Mobile virtual network operators (MVNOs) sell mobile services to consumers while piggybacking on another company’s network infrastructure. Because they don’t have to build and operate their own infrastructure, they’re able to customise their offering to bring affordable, tailored deals to consumers.

This is particularly attractive for brands who already have strong customer bases and want to build closer relationships.

Often, they partner with mobile virtual network enablers (MVNEs) who provide the virtual network capabilities while MVNOs focus on sales, collections, and customer care.

Globally, the MVNO market was valued at over US$78 billion in 2023, and is expected to reach almost US$140 billion by 2030. We are seeing telcos, tech, and traditional industries all converging to offer an ecosystem of services customised for their consumers, founded on mobile.

Banking upstart Capitec, for instance, has now over a million customers on its own mobile virtual network, Capitec Connect, using Cell C’s infrastructure, and is actively growing its products and services. Currently, Capitec clients spend more than R2-billion a month in airtime from South African mobile network operators, and Capitec sees an opportunity to capture some of that spend.

Similarly, Standard Bank Mobile is a virtual network on Cell C and MTN’s infrastructure and offers Standard Bank customers airtime to the value of their monthly banking fees.

Retail brands are getting in on the act too. Pick n Pay is expanding its Smart Shopper customer loyalty programme to include airtime on its PnP Mobile network, while Shoprite and Mr Price also have their own established networks. In addition, internet service providers (ISPs) are also moving into the MVNO space.

In all these arrangements, consumers are the winners. They’re able to cash in on loyalty rewards, access lower prices on data and airtime, and stretch their money further – a real good news story in a time of high inflation and global uncertainty.

And yet MVNOs have often stumbled in entering the South African market. Lycamobile, one of the world’s biggest MVNOs, shuttered local operations last year as their product proposition wasn’t applicable here. Virgin Mobile, also a highly recognisable brand, was also unable to attract a viable customer base.

MVNO success depends on leveraging an existing customer base with whom they already have a billing or credit relationship and preferably a loyalty program as well. Innovation and marketing is key in differentiating themselves from traditional mobile networks – and doing this often means bringing in the right support partners and systems.

The Operational Support System and Business Support System (OSS/BSS) is a software application that helps MVNOs to manage their billing, provisioning, third party interfaces and customer services.

To compete with traditional operators, MVNOs need a billing and CRM solution to manage subscribers, invoicing, and provide a 360-degree customer view, across multiple services. The problem is that traditional mobile operators’ OSS/BSS solutions are too costly for most MVNOs.

MVNOs need to be able to scale effectively while retaining their agility, and this scalability depends on an OSS/BSS system that’s up for the job.

MVNOs need to look for suppliers with cost-effective services who offer converged billing and can provide flexibility to scale up as customer bases grow. Ideally, customers should receive a single invoice across multiple services, for ease and transparency.

Providing connectivity to underserved communities is in everyone’s best interest. With the right infrastructure in place, we can keep this pipeline sustainable.

This charge was made at the Mobile Virtual Network Operators (MVNOs) Conference organised by Wireless Technology Labs (WTL) themed “Profitable Paths: Charting the Future of MVNOs in Nigeria” held in Lagos, Nigeria.

Satya Mekala, the chief executive officer, Wireless Technology Labs, has  charged MVNOs in Nigeria to deploy Value Added Services (VAS) for the sustainability and profitability of their business operations in Nigeria’s ICT sector.

According to Mekala, MVNOs will bring innovation to a country a lot more than a mobile operator or anything. MVNOs have the advantage of offering services in several areas of the economy, including education, agriculture, and rural development, among others.

In his words,

“Mobile operators are very rich, and they’re already making lots of money. It’s an unnecessary waste of time for MVNOs to compete with them. There are innovations that are not happening with mobile operators.”

Mekala also stressed that collaborative efforts among MVNOs enabled them to pool expertise, tackle challenges collectively, build profitable ventures, and deliver essential value-added services crucial for the populace and the nation

In his presentation, the Himmat Gill, Vice President of TecnoTree quoted that the global MVNO market size was worth $84.6 billion in 2023, and it is expected to grow at a compound annual growth rate of 6.7% to reach $116.8 billion by 2028. He also noted that the MVNO market is 50% distributed in Europe, 15% in APAC, 15% in the USA , and it is only 2% in Africa.

Speaking on some of the challenges, Gill said fierce competition in an oversaturated market, limited control over network quality and service prioritisation, and navigating through diverse regulatory landscape across regions may impend MVNO success.

However, market differentiation serves as a potential strategy for MVNOs to overcome these challenges, he said. Stressing that, for MVNOs to attract and retain customers, the need to distinguish themselves from competitors  can not be overemphasized.

Market differentiation, according to him, involves innovative service offerings, targeted niche markets, enhanced customer experience, and strategic partnerships.

In the same vein, Andriy Zhylenko, PortaOne chief executive fficer, tasked Nigerian MVNOs to identify their target audience, design niche-tailored VAS packages, and pick solution component that provides maximum freedom for in-house innovation.

Echoing Satya’s words, he urged MVNOs not to sell phone calls. Rather, they should offer solutions for growth and harvest IOT matket growth.

Nigerian MVNOs need to bundle third- party services while offering better CX and face fewer administration hardaches with low-code integrations,

On his part, Rune Holbeck, Nordic eSIM Chief Executive Officer, urged MVNOs to embrace and leverage eSIM technology in order to meet customers’ demand for flexibility, seamless connectivity, and digital solutions.

While stating that the rising adoption of IOT-connected devices and customer electronics is driving eSIM market expansion, Holbeck noted that eSIM technology positions MVNOs to stand out in Nigeria’s crowded telecom sector by offering innovation, digital-first services.

As part of the competitive advantage in the Nigerian market, the Nordic eSIM Boss said the adoption of eSIM technology by MVNOs will promote its rapid market entry, enhanced security features and helped target niche segments.

“With eSIM, MVNOs can launch new services faster, without the logistical challenges of distributing physical SIM cards. eSIM provides superior security compared to traditional SIMs, appealing to privacy-conscious customers and enterprises, “Holbeck said.

As a solution portfolio company, LATRO’s Director of Solution Architecture, Elmehdi Erroussafi, said operators need to be protected from various types of frauds, including bypass fraud, using advanced detection and prevention system.

Offering its innovative managed services, LATRO said its revenue assurance for MVNOs is designed to be flexible enough to add any specific need that operators might need based on the market environment. Erroussafi also said that for MVNOs operations to be a success,  they need a comprehensive framework for detecting revenue leakages.

The MVNO Conference which saw the participation of Chief Executive Officers and Chief Technical Officers of MVNOs in Nigeria, Internet Sevice Providers and industry stakeholders enjoyed the partnership of Tecnotree, MVNOWorx, Nordic eSIM, PortaOne, and LATRO.

Since Independence in 1960, the telecoms sector has impacted on the Nigerian economy in several positive ways, creating jobs and contributing to the Gross Domestic Product (GDP) of the Nigerian economy.

Before Nigeria gained independence in 1960, communication was mainly through the telegraphic wire, initiated by the colonial masters, but after independence in 1960, the Nigeria Telecommunications Limited (NITEL), was established in 1985, following the separation of postal services from telecommunications services.

At that time, telecommunication was the exclusive right of the affluent in the society as only few people had access to telephony.

People had to queue for hours and days, just to make international calls and sometimes local calls with the 090 NITEL line.

During that period, the existing Telecom operators were NITEL and a few other Code Division Multiple Access (CDMA) operators. However, the advent of GSM in 2001 eventually demystified telecommunications, and gave every Nigerian the access and right to communicate.

The introduction of GSM in 2001, increased the number of registered lines from less than 400,000 in 41 years of independence, to over one million lines in less than one year after the introduction of GSM.

After 2001, more and more Nigerians could sit at the comfort of their homes and offices to make instant calls within and outside Nigeria, through their personal hand-held devices called the mobile phones.

Banking activities are now transacted on the mobile phones, without the bank customer visiting the banks.

The most eventful period was between 2001 and 2015, when the telecoms sector was deregulated.

The Structures

In preparation for the proper regulation of the telecoms sector, the Nigerian Communications Commission (NCC), the telecoms industry regulator was established by an Act of law in 2000, and in 2003, the Nigeria Telecommunications Act was enacted, which defined the structures of the Nigerian telecoms sector.

In 2001, the first set of GSM operators were licensed by NCC. They included Econet Wireless (now Airtel), MTN and NITEL.

In 2003, Globacom was licensed and in 2008, Etisalat, now 9mobile, was licensed, while NTEL, the mobile arm of NITEL was licensed in 2014, but rolled out services in 2016, after the successful privatisation process, through a guided liquidation exercise.

However, following the inability of NITEL to cope with competition from GSM operators, it folded up its operations and was eventually sold to NATCOM in 2014, and later re-sold to private investor after it was unbundled and it currently trades as Ntel, under a private ownership and with the Asset Management Corporation of Nigeria as a majority shareholder.

Core Telcos

The core telecom operators (Telcos), such as MTN, Airtel, Globacom and 9mobile were initially licensed by NCC to provide mobile voice services.

The NCC however licensed Globacom as a Second National Operator (SNO) to offer fixed (landline), in addition to wired and wireless (mobile) services that other core operators were offering.

NCC also licensed Internet Service Providers (ISPs) to offer internet data services, but in 2005, NCC deregulated the telecoms sector and granted a five year exclusivity period to GSM operators and also extended their license to cover data service offering.

The core telecoms operators had to roll out their own telecoms infrastructure to aid network expansion across the country.

Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Engineer Gbenga Adebayo, said the core telcos had to reinvest their profits into telecoms infrastructure rollout because the federal government could not deploy the $285 million licence fee paid by each core operators for telecoms infrastructure rollout as early promised.

“To achieve effective network coverage, the core telcos were in building Base Transceiver Station (BTS) and connecting radio links, while at the same time, laying fibre optic cables and connecting them to BTS for effective coverage, which come at a huge cost and burden to telecoms operators. Again, the cost of maintaining BTS was on the high side, because each BTS runs on two generating sets on a 24 hours basis and the cost of diesel has continued to increase, even more so with the recent removal of fuel subsidy by the federal government,” Adebayo said.

He however said at a point, the core telcos had to outsource the building of telecoms masts (BTS) and the maintenance and operations to core infrastructure companies like IHS, to enable the core telecoms operators to focus on their core area of telecoms service delivery to telecoms subscribers.

Infrastructure Companies (InfraCos)

Infrastructure Companies like IHS, MainOne, Pan African Towers, SWAP Technologies, Zinox Technologies, Broadbased Communications, Brinks Integrated Solutions, O’dua Infraco Resources among others, were initially licensed as InfraCos to provide telecoms infrastructure across the six geo-political zones in the country, but the arrangement failed years later because of the difficulties most of the licensed faced in deploying telecoms infrastructure across the various regions.

The InfraCos were supposed to provide BTS also known as Base Stations, as well as fibre optic cables and radio links for the transmission of voice and data services, but they were resisted by agencies of state governments and social miscreants who demanded and to a large extent continue to demand outrageous amounts of money from them as condition for rollout of telecoms infrastructure in the various regions.

Some agencies of state governments either refused to grant Right of way (RoW) permit for infrastructure rollout, or arbitrarily hiked the charges for RoW in their states, thus making it difficult for InfraCos to roll out telecoms infrastructure in most states.

The situation forced some InfraCos like IHS and MainOne to return their InfraCo licence to the NCC, after paying N2.5 million for a ten-year InfraCo licence.

Some operators were licensed to deploy telecoms masts across the country, maintain the operations of telecoms masts and allow telecoms operators to collocate by fixing their radio links and antennae on the installed telecoms masts.

Operators involved in providing telecoms masts include: IHS, American Towers Company (ATC), Pan African Towers, Coloplus Limited, among others.

Telecom mast providers are faced with a myriad of challenges in deploying telecoms masts across the country, a development that affects the quality of telecoms service delivery across networks.

Multiple taxation, foreign exchange rate volatility and availability, vandalism, insecurity, asset theft, intra-industry indebtedness, non-designation of telecommunications infrastructure as Critical National Infrastructure and power solutions are some of the problems facing the industry sub-sector.

All these issues culminate in having an adverse impact on communications because the quality of service is ultimately affected.

With a gap of approximately 40,000 towers needed (without 5G) to cover the country as has repeatedly been said by NCC, these issues need to be addressed not only to improve the quality of current service delivery but also to provide network coverage for the rest of the country.

The building of towers in close proximity to already existing towers must also be addressed if national coverage is to be achieved within a reasonable time. The network must expand to currently unserved parts of the country.

Mr. Mike Ofili, CEO of Coloplus Limited, admitted to the huge challenges faced in deploying telecom masts across the country.

According to Ofili, the telecoms mast providers must have the buying and consent of telecoms operators, before investing in a single telecoms mast (Tower), which he said, cost between N35 million to N40 million, depending on the location.

Speaking on some of the challenges in deploying telecoms masts, Ofili said:

“Nigeria imports virtually everything that has to do with telecoms’ tower equipment and installation. We import the towers, generating sets, batteries, rectifiers, including iron/rod used for reinforcement. The rising cost of dollar and the weak value of the naira against the dollar, coupled with the inability to access Forex, have affected importation of equipment, thus slowed down network expansion, leading to poor telecoms’ service delivery. The issue of multiple regulation and multiple taxes imposed on telecoms’ operators by agents of governments, are also affecting the deployment of telecoms masts, which telecoms operators rely on to provide quality service to subscribers,” Ofili said.

According to him, with multiple regulations from state agencies, telcos are forced to pay for Environmental Impact Assessment fee, Right of Way (RoW) charges, mast installation charges, radioactive emission charges, among other charges that amount to multiple taxes.

“Cost of maintaining BTS is also very expensive. Nigeria has about 30,000 BTS installed across the country, with some decommissioned while about 30,000 BTS are still active, with high cost of maintenance. The cost of diesel to power a BTS is on the increase and the financial demand from non-state actors who parade themselves as social miscreants, is becoming rampant and impacting negatively on the running cost of a BTS. Network operators had tried severally to increase cost of telecoms services delivery in line with the rising cost of providing telecoms services, but the regulator, the NCC, will not agree, and the situation is adversely affecting telecoms operations across networks,” Ofili said.

Other sources online put the number of installed towers in Nigeria at over 40,000 as at 2021.

The development slowed down network expansion of telecoms operators and invariably, quality of telecoms service delivery has been adversely affected.

Following the collapse of the InfraCo arrangement, telecoms infrastructure providers started making personal negotiations to roll out telecoms infrastructure, but at a very slow pace that is negatively affecting telecoms service delivery, because the telecoms operators largely depend on the telecoms infrastructure companies to deliver telecoms services to the subscribers.

Speaking on some other challenges faced by telecoms operators, Engr. Gbenga Adebayo, the Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON),  said maintenance of BTS was becoming a major challenge as cost of diesel continued to rise since the removal of fuel subsidy by the federal government.

According to Adebayo, the operators have called for an increase in telecoms tariff, but the move has always been resisted by the NCC and the telecoms subscribers.

Adebayo added that all other sectors of the Nigerian economy have had reasons to increase cost of service delivery to the people because of the prevailing circumstances in the country occasioned by fuel subsidy removal, but there had always been resistance each time the telcos talk about price increase.

Value Added Service (VAS) Operators

VAS operators are another set of operators that the telecoms operators rely on in providing quality telecoms services to telecoms subscribers.

VAS operators are licensed by the NCC to provide value added services that will enable telecom operators to serve telecom subscribers in a most effective way. Although they do not have telecoms infrastructure, they ride on existing telecoms infrastructure to offer telecom services that are regarded as value added services to telecom operators.

Their services are essential because they determine the quality of service that telcos offer to their subscribers.

Some of the services include: Call waiting, Call forwarding, multi-party conferencing, Short Message Service (SMS), and special ringtones.

The major challenge faced by VAS operators is in the area of pricing of the solutions developed and offered by VAS operators.

Mr. Chijioke Ezeh, National Chairman of VAS operators, who confirmed the issue of pricing, said the issue still persists, because the sharing ratio between VAS operators and telecoms operators are never favorable to VAS operators. According to him, the telecoms operators will want to take the lion share from the proceeds of any VAS solution offered by telecoms operators, just because the telecoms operators own the telecoms infrastructure on which the VAS solution rides on.

Mobile Virtual Network Operators (MVNO)

In addition to the services that Value Added Service (VAS) operators are offering in the telecoms sector, the Nigerian Communications Commission (NCC), recently licensed 25 Mobile Virtual Network Operators (MVNO) that will also ride on the existing telecoms infrastructure to provide telecoms services that will enhance telecoms subscribers’ experience.

REVEALED: First Set of Licensed MVNOs in Nigeria

Although many industry analysts have blamed the licensing of 25 MVNOs, insisting it would lead to duplication of solutions and harsh competition between VAS operators and MVNOs. National Chairman of VAS operators, Mr. Chijioke Eze, however said both VAS and MVNOs could collaborate and offer quality services without any form of friction.

Internet Service Providers (ISPs)

The Internet Service Providers (ISPs) are another set of operators licensed by NCC to provide internet connectivity for data services.

Their role is interwoven with telecom operators that also offer data services, alongside voice services.

The interwoven nature of the role of both operators is causing great concern to ISPs that are smaller in size and capacity. Because the telcos have the numbers, with a subscriber base of over 220 million across networks, they appear to run out the smaller ISPs that have less subscriber base.

Commenting on the situation, Mr. Charles Anudo, the CEO of Swift Networks, who is an ISP, said most ISPs are being suffocated by Telecom operators that provide the same data service with ISP.

Top Internet Service Providers in Nigeria 2023

According to him, ISPs were originally licensed to provide data services, while telcos were originally licensed to provide voice services.

He however said the deregulation of the telecoms sector, provided opportunity for telcos to offer data services, a development, he said, was already affecting ISPs. He called on the regulator to ensure protection of ISPs, especially the smaller ISPs, in order to save them from going into extinction.

From the analysis above, it is evident that the challenges in the telecoms sector is not only embedded with telecoms operators, as it cuts across several sub-sectors like VAS, InfraCos, MVNOs, and ISPs, making it a web of challenges that has to be addressed by all the players in the industry, including the regulator, the NCC.

Olajide Adisa, is a Telecoms/ICT Analysts & Commentator writes from Abuja

Key points:

• In 2024, both South Africa and Nigeria have legislation pending that could potentially impact telcos/MVNO – uncertainty of how legislation could impact them in 2024 is worrying many African operators and MVNOs
• In Nigeria, fintech organizations are muscling in on MVNOS –this is leaving many people without bank accounts etc. disadvantaged. Could this gap widen in 2024?
• 40% of the adult population in Sub-Saharan Africa is connected to mobile internet, but an additional 44% live in areas covered by mobile broadband but do NOT use mobile internet services. Affordability and digital skills can make a difference – lack of connectivity is not only down to poor infrastructure.
• There should be a symbiotic relationship between Africa’s operators and MVNOs – both collaboration and competition can address the challenges in Africa’s mobile market.

Often, when the climate is just right, new business models emerge that completely shift the landscape. In the case of telecommunications, that game-changing moment came with the rise of mobile virtual network operators (MVNOs).

REVEALED: First Set of Licensed MVNOs in Nigeria

The MVNO space is an interesting one. MVNOs emerge when the conventional mobile value chain is broken, allowing new actors to step in and extract their own value. The relationship between MVNOs and traditional mobile network operators (MNOs) is symbiotic.

While MNOs benefit from additional revenue streams and expanded customer reach without significant marketing or operational costs, MVNOs can target niche markets and offer specialized services without the hefty investment in infrastructure.

This collaboration allows both entities to capitalize on unique market opportunities and cater to a broader audience. As well as partnering with MVNOs, some MNOs even move to acquire MVNOs or create their own digital brands to expand their service portfolio and grow their subscriber base.

This byplay between MNO and MVNO is crucial to driving the mobile economy. MVNOs, particularly those founded by entities from different industries, such as retail or banking, can leverage their existing customer base to tap into niche market segments that traditional MNOs might overlook.

These niches are growing with the emergence of 5G and the need to extend beyond the consumer market into tailored connected solutions for the enterprise market. If MNOs are to stay relevant and competitive, they will need to work with new market entrants or risk losing double in the long term — their customers and the direct revenue from niche MVNO markets.

A 2023 report by the GSMA refers to mobile connectivity as a “lifeline for society” and revealed that, by the end of 2022, more than 5.4 billion people globally subscribed to a mobile service. However, some of this growth is more visible in some regions than others, and it isn’t just about lack of infrastructure.

Africa, underserved markets, and the usage gap

Africa is proving an interesting case study regarding the relationship between MNOs and MVNOs and how that relationship is driving the mobile economy. For instance, around 40% of the adult population in Sub-Saharan Africa is now connected to mobile internet services.

At first glance, this might appear to be an infrastructure issue — that the reason subscribers are hovering at around 40% is because that’s all the coverage will allow. However, consider that an additional 44% of people live in areas covered by mobile broadband but do not yet use mobile internet services, and a clearer picture emerges.

This “usage gap” is partly due to affordability or a lack of digital skills — both areas in which MVNOs have the agility and flexibility to make a difference.

Also, in most cases, MNOs are not motivated to invest in the low ARPU (average revenue per user) rural market segment with their conventional high-cost customer acquisition models.

This usage gap presents a remarkable opportunity for MVNOs in the region to capture mobile subscribers — the coverage is there, but the services are not. It’s the perfect example of an underserved market, so what about Africa is holding MVNOs back?

To regulate, or not to regulate?

Regulatory uncertainty is one of the biggest challenges facing MVNOs, partly because of the sheer variety of services they are available to offer and the markets they’re able to tap into through service bundling.

Their ability to offer voice, data, and other value-added services without the cost or responsibility of managing physical infrastructure makes them highly agile players. Agility breeds competition, and competition demands regulation.

This regulation can be quite stringent and vary from region to region, making the move into new territories a risky gambit for even the most experienced MVNOs.

Such regulation can be suffocating, but it can also be liberating. For instance, this year, the Electronic Communications Amendment Bill was published for comment in South Africa.

The bill, fully expected to be signed into law in the next 12 months, will empower regulatory authorities to share spectrum licenses and push established MNO players to open up to MVNOs. y

This approach will prove vital to creating competition within the mobile market, and will also help to close the usage gap described above.

If MVNOs can appeal to niche audiences and offer more competitive prices and packaged bundles, South Africa will see the number of people using its networks increase.

Nigeria’s push to shake up the market

While this new regulation, which includes and even favors MVNOs for their ability to drive the market, waits in the wings, Nigeria is taking a more direct approach. In June 2023, the Nigerian Communications Commission (NCC) granted 40 new MVNO/E licenses to shake up the market and fuel the mobile economy. However, this is more of a “push” than a “pull” strategy.

Nevertheless, the benefits to the Nigerian consumer with this major move are expected to be significant. Nigeria, which ranks today 114th in the global data affordability price index, can definitely use this hyper-competitive environment to drive the data costs down and improve options for the end users.

In the UK and Europe, MVNOs were largely embraced by MNOs as a tactical approach to growing their own market share, “pulling” them into their orbit. MNOs in Nigeria are now being nudged to re-evaluate their strategic plans in much the same way.

Whether or not this approach will close the “usage gap” in Africa remains to be seen. Still, the hope is that by buying network capacity from MNOs, MVNOs will swiftly rise in the market through a flexible business model that passes savings down to the consumer.

The fintech monopoly and bundling services

Nigeria’s approach, which is to actively encourage MVNOs to set up in the region and push MNOs to accommodate them, might also see the introduction of better bundles and services.

One of the biggest challenges aspiring MVNOs currently face is the monopolization of the MVNO space by fintech organizations, particularly banks.

Banks such as FNB, Capitec Bank, and Standard Bank have the monetary muscle to move into the mobile space and have done so very effectively, setting up their own MVNO frameworks. However, these bank-based MVNOs can only appeal to a very specific and limited audience.

To qualify for FNB Connect, for instance, subscribers must be over 18 and hold a transactional account with the bank. Consider that almost two-thirds (57%) of Africa’s population lacks any form of bank account, and the opportunity for new MVNOs becomes clear.

However, this opportunity is locked behind a set of unique perceived challenges, not least the prospect of going up against established, well-funded banking institutions that might see the arrival of new MVNOs as a “land grab.”

This is perhaps something new regulatory frameworks, such as the Electronic Communications Amendment Bill referenced above, can smooth out in time.

A glance into the future

The telecommunications landscape is undergoing a transformative shift, with MVNOs playing a pivotal role in reshaping the industry’s future.

The symbiotic relationship between MNOs and MVNOs is not just about competition but collaboration, aiming to bridge the gaps in connectivity and service offerings.

With its unique challenges and opportunities, Africa stands at the forefront of this evolution. While regulatory hurdles and market monopolies pose challenges, they also present opportunities for innovation and growth.

The proactive steps taken by countries like Nigeria, combined with the potential regulatory changes in South Africa, signal a positive trajectory for the MVNO market in the region.

As the continent grapples with the “usage gap” and the need for more inclusive financial and digital services, MVNOs have the potential to be the catalysts for change.

Through tailored services, competitive pricing, and tapping into underserved markets, MVNOs can enhance the mobile economy and contribute to Africa’s broader socio-economic development.

The journey ahead is filled with promise, and as the dynamics between MNOs and MVNOs continue to evolve, the ultimate winners will be the consumers who stand to benefit from a more inclusive, connected, and vibrant mobile ecosystem.