The Nigerian Communications Commission (NCC) has announced the suspension of the issuance of communication licences in three categories including Mobile Virtual Network Operator (MVNO), Interconnect Exchange, and Value Added Service Aggregator.
The Commission announced this in a public notice issued by its Director of Public Affairs, Mr. Reuben Muoka on Friday. It, however, said the suspension, which takes effect from May 17, 2024, is temporary.
This means that no company will be able to apply for a new licence in any of the three affected categories. NCC said the suspension is in line with its powers under the Nigerian Communications Act (NCA) 2003 to grant and renew licenses, promote fair competition, and develop the communications Industry.
It, however, noted that all pending applications for the same licences would still be considered and treated accordingly.
Why licensing is suspended
Explaining the rational behind the suspension, NCC in the public notice said,
“This temporary suspension is necessary to enable the Commission to conduct a thorough review of several key areas within these categories, including the current level of competition, market saturation, and current market dynamics.
“The public is invited to note that during the suspension period commencing on 17th of May, 2024, new applications for the aforementioned licenses will not be accepted. This is without prejudice to pending applications before the Commission which will be considered on its merits.”
NCC’s database shows that 45 companies are currently licensed as VAS aggregators. The VAS Aggregator licence was introduced in 2029 to guard against rising anti-competitive practices and other unfair sharing formulas between VAS licensees and the Mobile Network Operators (MNOs). The Aggregators play the role of the middlemen between the MNOs and the VAS providers.
An interconnect exchange, or clearinghouse, in Nigeria’s telecommunications industry, is a central exchange where calls from different mobile network operators are connected, billed, and reconciled. Currently, 37 companies are operating in the interconnect space in Nigeria.
The MVNO licence is the newest category of licensed introduced by the NCC. As of the last count, 43 companies have been licensed to operate in the five tiers of the licence. However, none of them has rolled out service yet.
An MVNO is a telecommunications product and service operator that rides on top of the infrastructure capacity of a fully licensed mobile telecommunication service provider or mobile network operator (MNO). This means that the operators will not need investments in their infrastructure but leverage existing facilities across the country to provide services.
The entrance of MVNOs into the Nigerian telecom market is expected to provide competitive offerings and lower the costs of calls and data for subscribers.
Aside from lowering the cost of access to telecommunications services, NCC said the MVNOs would help to drive the government’s efforts to extend telecom services to more rural, under-served, and unserved communities across the country.