WHAT IS THE FUTURE OF TELECOMMUNICATION IN NIGERIA

During the last protest(in August), the country saw a plunge in the quality of connectivity provided by the big telcos and this has lead to several interesting conversations about the future of telecom in nigeria and dependence on the big 4 MNOs-MTN, AIRTEL, 9MOBILE & GLOBACOM

About a year ago, the NCC announced the introduction of MVNOs and awarded MVNA, MVNE, and MVNO licenses to 43 companies. Now what does this mean and what has happened since then?

This significant move by the NCC aimed to diversify the telecom landscape in Nigeria and enhance connectivity options for millions of users. As we look at the future of telecommunications in Nigeria, it’s crucial to understand the impact of this decision and the potential changes it brings. Let’s get into what MVNOs are, their role in the industry, and how they could reshape the telecom sector in Nigeria.

What are MVNOs?

An MVNO (Mobile Virtual Network Operator) is a telecommunications operator that provides services by renting capacity from fully licensed Mobile Network Operators (MNOs) like MTN, Glo, and Airtel.

MVNOs don’t invest heavily in infrastructure but instead utilize the existing networks of MNOs, which earn secondary revenue from these arrangements.

MVNOs primarily aim to serve underserved areas like rural communities and niche demographics by offering cheaper and more versatile services.

WHY NOW FOR MVNOS FROM NCC?

Reports show that smartphone usage is increasing in Nigeria, leading to higher demand for internet connectivity.

Nigeria ranks 7th globally in mobile phone usage and 11th in internet penetration. The NCC’s move to introduce MVNOs comes as MNOs are maturing enough to support these new operators. As the telecom industry develops, it can serve more people effectively.

WHAT DOES MVNOs INTRODUCTION MEAN FOR THE TELECOM SECTOR

The introduction of MVNOs will enable product diversification, identification of new markets and promote healthy competition. Competition is good for business as it will make telecom providers think of how to serve customers better and offer competitive advantage in order to stand out from competitors

HOW WILL THE MNOs SUPPORT MVNOs

MNOs support MVNOs by:

• Infrastructure Sharing: Providing access to network infrastructure like towers and spectrum.
• Wholesale Agreements: Offering network capacity at wholesale rates.
• Regulatory Guidance: Assisting with compliance and licensing.
• Operational Support: Helping with billing systems and customer service.
• Marketing Assistance: Engaging in joint marketing and providing sales channels.
• Innovation: Collaborating on product development and technology integration.

MVNEs also support MVNOs by handling the tech and operations for them, while MVNAs score better deals with MNOs and manage the commercial side of things. A notable one is Imbil Telecom

MVNO LICENSE TIER

MVNO licenses are divided into five tiers:

Tier 1: These are super dealers who sell MNO products for profit but do not own their SIM cards.
Tier 2: These license holders own SIM cards and sell services under their own branding.
Tier 3: These include all benefits of Tiers 1 and 2, plus they have a switching network and core network.
Tier 4: These are aggregators who can host Tier 1, 2, and 3 license holders.
Tier 5: Similar to Tier 4, but with the addition of low-level infrastructure, making them mini MNOs.
Tiers 4 and 5 license holders could potentially ease the burden on MNOs by hosting multiple MVNOs.

Challenges MVNOs (might) face

Since the MVNOs depend mostly on MNOs for operations and are regulated by the NCC, it is imminent that they might face some challenges.

For one, it has been over a year since the MVNO licences were granted, yet none has begun operations. why is this?

• Regulatory Hurdles: Complex regulations can delay market entry. Solution: Engage with regulatory bodies and stay informed.
• Competition: Intense competition might reduce profit margins. Solution: Target underserved markets and offer unique services.
• Infrastructure Limitations: Dependence on MNOs’ infrastructure may cause coverage issues. Solution: Partner with multiple MNOs and invest in emerging technologies like 5G.

Strategies for Overcoming These Challenges

1. Regulatory Compliance: Establish a regulatory affairs team and participate in industry consultations.
2. Market Differentiation: Conduct market research and implement targeted marketing campaigns.
3. Infrastructure Investments: Form strategic partnerships and invest in advanced network management systems.
4. Customer-Centric Approach: Provide exceptional customer service and offer value-added services.

What’s in it for the MNOs?

MNOs may worry about MVNOs affecting their revenue streams, given their investments in network infrastructure. However, the MVNO arrangement offers several benefits:

Utilizing Excess Capacity: MNOs can efficiently use their excess network capacity.

Expanding Subscriber Reach: By partnering with MVNOs, MNOs can extend their subscriber base and reach new markets.

Network Expansion and Unique Offerings: This collaboration enables network expansion and the introduction of niche products tailored to specific consumer demands.

Additional ROI: MNOs can gain more returns on their network investments by offering value-added services like cloud-based or AI-related features.

Innovation Opportunities: MNOs can either acquire innovative MVNOs or create their own, fostering further growth and innovation.

WHAT DOES ALL THESE MEAN FOR CONSUMERS

In the UK, MVNOs emerged primarily for commercial gains. In contrast, the NCC is encouraging MVNO licence holders, through legislation, to focus on rural areas. Here are some benefits for consumers:

• Reduced Costs: Cheaper plans due to rented network capacity.
• Improved Service Quality: Better customer support and tailored solutions.
• Innovative Services: Niche offerings like mobile financial solutions.
• Enhanced Connectivity: Reliable services in underserved areas.
• Flexible Plans: Customizable and no-contract options.

CONCLUSION

The NCC’s introduction of MVNOs is a game-changer for Nigeria’s telecom sector. It stands to benefit MNOs, MVNOs, MVNEs, MVNAs, and consumers alike, creating a win-win scenario for everyone involved!