A new type of operator is entering the Nigerian telecom market: mobile virtual network operators. These operators provide their telecom services by relying on mobile network operators such as MTN and Airtel, whose infrastructures they use.
The Nigerian Communications Commission (NCC) released on Tuesday, March 22, the “Licensing Framework for the Establishment of Mobile Virtual Network Operators in Nigeria”. This document sets, among other things, license fees for mobile virtual network operators (MVNOs) between 30 and 250 million naira ($72,000 and $600,000), depending on the level. Tier 1, 2, 3, 4 and 5 operators will pay N30 million, N65 million, N100 million, N150 million and N250 million respectively for their licenses. The validity period of the license is 10 years, renewable.
The NCC defines a mobile virtual network operator as an operator of telecommunications products and services that relies on the capability of a fully licensed telecommunications service provider or mobile network operator (MNO) . “ The MVNO enters into a “wholesale agreement” or a “revenue sharing agreement” with the telecommunications company (telco) through negotiations and provides its services after purchasing wholesale resources from it. The essential difference between an MVNO and an MNO is the simple fact that an MVNO does not own spectrum elements, regardless of its operating model ”.
The Framework also provides licensing criteria for future operators. These include for the MVNO to prove that it is a legally registered legal entity; sign a full contractual agreement with at least one host network operator or national carrier; to prove that it has the necessary financial capacity to cover its investment and operating expenses for the implementation of its strategic operations; meet the technical requirements of the NCC to operate at the level of their choice.
It was in 2017 that the NCC began the process of opening up the Nigerian telecommunications market to MVNOs. The regulator then issued a request for proposal (RFP) to this effect. In December 2020, it released the first draft document on the licensing framework for the establishment of mobile virtual network operators in Nigeria. This publication followed an industry stakeholder workshop on MVNOs to collectively examine the potential benefits, technical feasibility, market demand and appropriate model for the adoption of this category of stakeholder in Nigeria.
The publication of the “Licensing framework for the establishment of mobile virtual network operators in Nigeria” confirms the opening of the Nigerian telecom market to new telecommunications companies. The arrival of MVNOs should also ensure more competitive offers on the market and reduce the cost of calls and data for subscribers. The NCC said MVNOs would help the government’s efforts to extend telecommunications services to more rural, underserved or unserved communities in the country.