In the last few weeks, the Nigerian telecoms regulator the NCC – Nigerian Communications Commission – has issued over 30 MVNO licences. It’s taken almost two years to reach this point and is the culmination of the NCC’s ambition to broaden and deepen the country’s telecoms market. It’s reported that the licence issue has raised in the region of N5.9billion for the government.
The NCC’s commissioner Prof Umar Danbatta, has been reported as saying the licences, that each run for a period of ten years, are a crucial part of keeping up to date with industry developments and support ambition to roll out 5G, as well as introduce more competition and opportunity to run telcos in the fixed, M2M, B2B and rural sectors. Wholesale is also seen as a means to help balance the revenue loss that incumbents have experienced as more OTT players take a share of the pie.
As you’d expect with an MVNO model, the new MVNOs will use the networks of the existing operators, namely MTN, Globacom, Airtel and 9mobile.
Challenge brings opportunity
The challenges with such a vast country both in terms of land mass and geography, in particular the challenges of supporting mobile in outlying areas, are significant. The scale of the customer numbers also adds a further dimension.
However, it’s my opinion that there are enormous opportunities too. In fact, we advised numerous potential MVNOs in the run up to the process and submitted a report to the commission summarising the scale of the market opportunities, and the conditions that create a buoyant sector.
Every MVNO will be different addressing these varied challenges, offering services to different segments and regions. Vertical markets will also be targets – oil, tourism, and agriculture all present options for specific propositions. These propositions will include the deployment of private networks at large campus-based operations such as ports through to eSIM for tourists, and IoT / M2M solutions for heavy industry and agriculture.
All the licence applicants had a choice about how they wanted to run their MVNO and the technical investment they were prepared to make. The tiered system of licensing reflects this.
The licences are divided into five tiers, each one defined by the services and technology set up of the MVNOs. The specific definitions from the regulator are as follows
Tier 1: An MVNO within this tier leverages on its ability to offer services to its customers without owning any switching or intelligent network infrastructure. They do not control any numbering resources. Responsibilities lie with the host Licensee to provide wholesale capacity to the V.O for delivery of its products and services.
Tier 2: An MVNO within this tier assumes more control of the value chain which allows it to significantly differentiate itself from its host. The VO does not have Core Switching and Interconnect capabilities but can set up its own Intelligent network (IN) to provide their own IN services to the customer. It can own more of the customer segment than Tier-1 operators with the capacity of establishing its own Home Subscriber Register or Authentication centre, Equipment Identity Register, and Home Location Register, if it desires to.
Tier 3: Within this tier, an operator relies on its technical and commercial prowess to launch and operate a full core network with switching and interconnect capabilities. The VO relies totally on its host to provide Radio Access capacity at wholesale to deliver its products and services to its customers. The MVNOO can engage in interconnect agreements with other network providers. Revenue generation stems from both outbound and inbound calls which gives it full control over its tariff structure.
Tier 4: The operator within this tier is responsible for aggregating and/or Enabling MVNO services within the market. It relies on a model in which it stands as a middleman between the MNO and multiple MVNOs. The aggregator is responsible for purchasing bulk capacity from a licensed network operator, and reselling it to multiple MVNOs, therefore streamlining the process of negotiating capacity agreements with said network operators. The aggregator is permitted to choose what level of the value chain it desires to aggregate.
Tier 5: Unified Virtual Operator. In the simplest terms, an MVNO within this tier can decide the level of service it desires to offer ranging from Tier – 1 to Tier – 4. This gives the MVNO freedom of choice to deploy its services the way it deems fit if it still has a valid license. They can engage in “Shared Rural Coverage Agreement” within underserved and unserved regions.
𝗧𝗵𝗲 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗮𝘄𝗮𝗿𝗱𝗲𝗱 𝗠𝗩𝗡𝗢 𝗹𝗶𝗰𝗲𝗻𝘀𝗲 𝗶𝗻 𝗡𝗶𝗴𝗲𝗿𝗶𝗮
- Topit Virtual solutions Ltd
Tier 2 (Nine Companies)
- Routelink Integrated Systems Ltd
- Hazon Technologies Limited
- Asel Telecom Nigeria Limited
- Briclinks Africa Plc
- Pisi Mobile Services Limited
- Univasa Nigeria Limited
- Imose Technologies Limited
- Infratel Limited
- Telconix Networks Limited
Tier 3 (Seven companies)
- Amics Technologies Limited
- Zegtel Limited
- Telewyz Limited
- Siu Telecommunications Network
- Abrindex Nigeria Limited
- Metropolitan Consortium Nigeria Ltd
- IPNX Nigeria Limited
Tier 4 (Four companies)
- Imbil Telecoms Solutions Nig. Ltd
- Environmental Expressions Limited
- DMK Telecommunication Nig. Ltd
- Holla Tags Limited
Tier 5 (Ten companies)
- Systegra Technologies Limited
- Choffan Communications Limited
- Mab Consultant and Associates Ltd
- H & Y Business Global Limited
- Taima Technologies Ltd
- Global Communication Extension Services Ltd
- USK (S) Ventures International Ltd
- Paribas Communication Limited
- Fourth Industrial Skills Consult Limited
- Mobilise Communication Ltd
It’s very interesting to see that the majority of licensees have opted for the flexibility of the Tier 5 licence, or the opportunity afforded by a Tier 4 MVNA licence. With only four host networks and over 30 MVNOs to enable, it’s likely that those with an MVNA licence will be in strong position to enable on behalf of network operators keen to outsource the complexity of running multiple MVNO relationships.
It’s an extremely exciting time for this market, and there will be opportunities not just for the MVNOs, but also for parallel industries, including data insight, billing, marketing, and mobile application providers.
If you are one of the MVNOs licensees that wants to out compete the market from day one, or you’d like to understand how your application business can get in on the act, then get in touch to find out how Graystone Strategy’s MVNO launch expertise can help you achieve success. Our blog on “The five MUST DO actions Nigeria’s new MVNO licensees should take for a successful launch” must do to deliver a successful go to market launch is useful further reading.
- BT wins Lycamobile and two more MVNOs. Will we see more host operator switching? - July 6, 2023
- The five MUST DO actions Nigeria’s new MVNO licensees should take for a successful launch - July 3, 2023
- Nigeria’s newest mobile licensees have a big opportunity to change the telecoms market - July 3, 2023