Two years after the Nigerian Communications Commission (NCC) licensed 43 Mobile Virtual Network Operators (MVNOs) to expand telecom competition and deepen connectivity, only one company, Vitel Wireless, has successfully launched commercial operations.
The sluggish rollout has raised questions about the viability of Nigeria’s MVNO model in a market long dominated by established Mobile Network Operators (MNOs) such as MTN, Airtel, Globacom, and 9mobile.
The NCC had projected that allowing MVNOs to operate under a tiered licensing framework would spur innovation, increase consumer choice, and drive inclusion, especially in underserved areas.
However, the reality two years later suggests that regulatory approval alone is not enough to overcome the market’s structural and economic barriers.
After the initial enthusiasm of the licensing, most of the licensed companies have struggled to raise funding, negotiate wholesale agreements with MNOs, and develop competitive value propositions.
For some of the licensed MVNOs, Naijaonpoint gathered that lack of funds has been the major issue thwarting their initial rollout plans.
Specifically, an executive of one of the licensees, who spoke with this publication under the condition of anonymity, lamented the sudden change in macro-economic conditions a few months after his company acquired the license in 2023.
“We had our plans, we received investment promises, but the economy suddenly tumbled and all projections changed. Those who had promised us funding backed off as they became skeptical,” he said.
“The main issue is that many of them just went for the licence without understanding the business angle to it. After getting the licence, they are beginning to realise telecom business is not a joke,” he said.
Sharing a similar sentiment, the Director of U.SK Mobile, Chidi Ajuzie, the challenges facing Nigeria’s MVNO ecosystem go far beyond regulation.
According to him, many investors entered the space expecting quick profits without fully grasping the technical and financial requirements.
“Too many people think that once you get a licence, the money will start rolling in. Without infrastructure and innovation, many MVNOs will die out quickly,” Ajuzie said.
Ajuzie predicts that only half of the licensed MVNOs may survive the next five years, given the intense competition and capital demands of building even partial infrastructure.
He explained that lower-tier MVNOs, which rely heavily on MNOs for connectivity, face limited control over quality of service and pricing, while higher-tier operators must invest heavily in their own systems, such as core networks and billing platforms.
“Smaller players, especially those in lower tiers, will face significant financial pressure since they are expected to build part of their own infrastructure,” he added.
Nonetheless, Ajuzie sees potential for innovation, particularly for operators that develop niche products tailored to Nigeria’s diverse demographic and economic segments.
Nonetheless, Ajuzie sees potential for innovation, particularly for operators that develop niche products tailored to Nigeria’s diverse demographic and economic segments.
Several industry stakeholders agree that Nigerian MVNOs will struggle if they attempt to compete directly with established MNOs on voice and data pricing.
President of the Association of Telecommunications Companies of Nigeria (ATCON), Tony Emoekpere, explained that the NCC’s multi-tier licensing structure was designed precisely to encourage such innovation.
“The NCC introduced multiple MVNO licence categories to liberalise the market and give consumers more options,” Emoekpere said.
However, he warned that sustainability will depend on differentiation:
“MVNOs can only remain viable if they distinguish themselves in a market already dominated by MNOs offering internet, enterprise, and fintech services.”
Emoekpere pointed to Kenya’s M-Pesa as a case study in telecom-enabled financial innovation that transformed inclusion for low-income users. He said Nigeria’s MVNOs could replicate similar success by addressing rural connectivity and digital payment gaps.
“Designing a low-data package for POS machines in rural areas could be a game-changer. These terminals do not need broadband; a simple 2G network can handle them,” he added.
Contrary to industry experts’ expectations, Vitel Wireless, the first MVNO to have launched in Nigeria, is banking on data and voice as the core of its service provisioning.
The company, which is leveraging MTN infrastructure, launched with physical and E-SIM, and is now wooing Nigerians to join its network.
Vitel Wireless, however, is positioning itself to serve small businesses, promising to provide them “affordable, reliable, and secure connectivity.”
Speaking at the launch, Executive Chairman of Vitel Wireless, Kenneth Nwabueze, noted that the network is more than a communication tool, describing it as a growth engine for businesses.
“We understand the challenges small and large enterprises face in managing communication costs and team coordination. Our network provides an affordable solution that combines smart technology with security and scalability,” he said.
Naijaonpoint had reported that 43 companies spent a total of N8.6 billion to acquire the MVNO licences even amidst concern that the operators may have to struggle to acquire customers in a market already dominated by mobile network operators (MNOs) comprising MTN, Airtel, Globacom, and 9mobile.
The 43 MVNOs, based on contractual agreements, will be leveraging the infrastructure of the MNO to provide telecom services in unserved and underserved areas of the country.
This, however, raises more concern about capacity as the MNOs are also under pressure to increase their network capacity as demand for data grows.