The Nigerian Communications Commission (NCC) has suspended the issuance of communication licences to telecom service providers in three categories: Mobile Virtual Network Operator (MVNO), Interconnect Exchange, and Value-Added Service Aggregator.
On Friday, the Commission announced this in a public notice issued by its Director of Public Affairs, Mr. Reuben Muoka. It, however, said the suspension, which takes effect from May 17, 2024, is temporary.
On Friday, the Commission made this announcement through a public notice issued by its Director of Public Affairs, Mr. Reuben Muoka. The notice informed the public that the suspension, which took effect on May 17, 2024, is a temporary measure to address a specific issue. Although the suspension is currently in place, it is not permanent and will be lifted once the necessary conditions are met.
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No company can apply for a new licence in the three relevant categories. The NCC stated that the suspension is in line with its authority under the Nigerian Communications Act (NCA) 2003 to award and renew licences, promote fair competition, and grow the communications industry.
However, it is noted that all pending applications for the same licences would still be considered and treated accordingly.
Reasons behind suspension of Licences
The reason behind the suspension of licencing: In its public notice, the NCC explained the suspension, stating that it was necessary to thoroughly review several key areas within these categories, including the current level of competition, saturation in the market, and the dynamics of the market. Therefore, the temporary suspension was necessary to allow the review to occur.
The public is invited to note that new applications for the licences above will not be accepted during the suspension period that commenced on the 17th of May, 2024. This is without prejudice to pending applications before the Commission, which will be considered on its merits.
NCC Licences 43 MVNOs to Boost Telecom Competition and Rural Access
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 unfair sharing formulas between VAS licensees and the Mobile Network Operators (MNOs). The Aggregators are 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 NCC’s most recent licence category introduction is the MVNO licence. As of the most recent count, Forty-three businesses have licences to operate in each of the five licence categories. None of them, though, have started offering service yet.
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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 calls and data costs for subscribers.
NCC stated that the MVNOs would support government efforts to expand telecom services to more rural, disadvantaged, and neglected populations nationwide and bring down the cost of access to telecom services.
