MVNO license will attract more investments to Nigeria’s telecom industry – Expert

An IT expert, Andriy Zhylenko, has said that the new licensing framework for Mobile Virtual Network Operators (MVNOs) issued by the Nigerian Communications Commission (NCC) would drive more investments to the country’s telecom industry and provide connectivity for more Nigerians.  

Zhylenko, who is the Chief Executive Officer (CEO) of PortaOne, a software company, said the license would enable companies to deliver better connectivity platforms and hardware solutions for underserved remote communities. 

According to him, MVNOs have been a big part of the international telecommunications industry for decades and the first MVNO model was launched by Virgin Mobile UK in 1999.

He said this Nigerian experiment could also help drive the development of the next wave of communications technologies; helping to define the future of the industry in the rest of Africa and potentially across all emerging economies. 

Industry competition 

While noting that the licensing framework which comprises five tiers, would ultimately see many of these MVNOs in direct competition with one another, Zhylenko said:  

• “The new licensing framework will create a unique competitive environment that will help industry analysts better assess the most effective in the modern age of mobile communications, Internet of Things, and Artificial Intelligence.” 

He added that the framework also provides a unique opportunity to see how different technologies will play out in terms of providing access to more advanced and more affordable communications services. 

Zhylenko noted that as more of MVNOs enter the market, it would drive a lot of innovation, not just in voice and messaging packages for mobile phone users, but also in e-commerce, and Electric Vehicle charging stations. 

25 companies already licensed 

Nairametrics recently reported that the NCC had licensed 25 new companies to provide mobile telecommunications services under the Mobile Virtual Network Operator (MVNO) framework.  

The companies will be providing the same services as MTN, Globacom, Airtel, and 9mobile, albeit on the same infrastructure built by the old operators. The entrance of the MNVO is expected to provide competitive offerings in the telecoms market and lower the costs of calls and data for subscribers.  

Aside from lowering the cost of access to telecommunications services, NCC said the MVNOs would help to drive the government’s efforts to extend telecom services to more rural, under-served, and unserved communities across the country. 

According to industry experts, by buying network capacity from Mobile Network Operators (MNOs), the MVNOs can swiftly rise in the market through a business model that passes these savings down to the consumer.

They added that the MVNOs can also offer a more tailored-made service versus MNOs, which tend to offer more of a generic service that suits the masses. 

What you should know 

A Mobile Virtual Network Operator (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 (MNOs).

This means that the operators will not need investments in their infrastructure but leverage existing facilities across the country to provide services. 

According to Fortune Business Insights, the global MVNO market size is projected to rise from $67.54 billion in 2020 to $123.40 billion in 2028, at a CAGR of 7.9% during the forecast period, 2021-2028. 

As of June 2014, 943 MVNOs and 255 MNO sub-brands were active worldwide.

This represents a total of almost 1,200 mobile service providers worldwide hosted by MNOs, up from 1,036 in 2012. 

Accordingly, GSMA Intelligence noted that between June 2010 and June 2015, the number of MVNOs worldwide increased by 70%, reaching 1,017 in June 2015.

As of December 2018, 1,300 active MVNOs were operating in 79 countries, representing more than 220 million mobile connections—approximately 2.46% of the total 8.9 billion mobile connections in the world.