By Chinenye Anuforo
The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof Umar Danbatta, has reiterated the importance and role of mobile virtual network operators (MVNO) in advancing and driving Nigeria’s digital economy agenda.
A mobile virtual network operator is a wireless communications services provider that does not own the wireless network infrastructure over which it provides services to its customers.
They are believed to be of immense value to the mobile telecommunications industry as they provide services at an affordable rate to customers and work with Mobile Network Operators (MNOs) who own the telecommunication infrastructure.
Danbatta who was represented by Muhammed Babajiks, director of licensing and authorisation, NCC, at the second edition of the Telecoms Sector Sustainability Forum (TSSF) organised by Business Remarks said that the NCC was committed to improving telecommunications services, especially with the introduction of the MVNO licence and the deployment of 5G.
“The commission has introduced mobile virtual network operators (MVNOs) licences that will generate employment and also bridge the gap between the unserved and the underserved in society. It will also further engender competition and provide choices for telecommunications consumers,” he said.
The MVNO license is a five-tier classification with distinctive services to be offered by the players in different tiers.
“Tier one is a virtual operator, which relies totally on hosts facilities with restricted tariff control; tier two is simple facilities operator, which owns the intelligent network, and has loose tariff control; tier three is core facilities operator which can negotiate interconnect agreements; has major tariff control, tier four is virtual aggregator/enabler, which performs aggregation and enabling, but only operates in unserved regions; tier five is the unified virtual operator, which has the freedom to operate in the whole segments/tiers.
“Moreover, it is envisaged that the recent roll-out of 5G in Nigeria will ensure more successes in the industry’s economic growth with the hope that it will not only usher an array of improvements in internet connectivity.”
Danbatta urged stakeholders to work together to ensure that operations are conducted within the respective telecommunication licenses, and that service challenges and demands are adequately delivered.
In her opening remarks, the Editor, Business Remarks, Bukola Olanrewaju said according to GMSA’s Sub-Saharan Mobile Economy Report for 2021 mobile networks have become a lifeline for people and businesses during this time, especially where the adoption of mobile services such as mobile data and mobile money is concerned. ” It is estimated that, across Sub-Saharan Africa, there will be 120 million new subscribers by 2025, taking the total number of subscribers to 615 million (50% of the region’s population).
The increasing number of mobile subscribers, technological advancements, and demand for connectivity have also played an important role in creating a significant opportunity for MVNOs to thrive in the sector.”
Olanrewaju also said a McKinsey paper stated that the latest evolutionary wave is seeing MVNOs capture 10 to 40 per cent of mobile business in developed markets. “With the appropriate regulatory environment and access to infrastructure, MVNOs in emerging markets like Africa can be steered in the same direction.
In addition, mobile technology plays an increasingly important role for consumers and businesses alike, and for many Nigerians, mobile broadband is the first and only option for accessing the internet.”
The Business Remarks editor said this increased growth and adoption has created an opportunity for MVNOs to provide new digital solutions for small and large enterprises and customers.
On his part, Yemi Oshodi, chief executive officer, Information Connectivity Solution Limited, said running MVNOs in Nigeria was quite expensive, adding that the government can help by investing.
“MVNO capital is very expensive in Nigeria. So the question is, how does an MVNO make money in Nigeria but even with those low returns, there are still ways to make money,” Oshodi said.
“On partnerships, Nigeria has its peculiar problems. There has to be respected for contractual rights. Nigerians are known to violate contracts quite frequently.
“However, since MVNO capital is so expensive, smaller players are unable to raise funds needed to fund the innovation out there. So basically, we have to wait until the major players invest their money. Then we can come in as MVNOs to ride on whatever investment they have put on the ground by reselling.
“The government can come into play by co-investing. Some people would call it a subsidy. This means when large players get their bills paid in large cities, some of that money is used to subsidise rural areas, and that’s what is done in most parts of the world. We are hoping that it will be done here in Nigeria also.”