Toyosi Olajide
The Nigerian Communications Commission (NCC), the regulator for the telecommunications industry in the country has opened up the space with a new window that allows for new companies to operate in the sector through the Mobile Virtual Network Operator (MVNO) licensing framework.
According to NCC, the entrance of the MNVO is expected to provide competitive offerings in the telecoms market and lower the cost of calls and data for subscribers. Aside from lowering the cost of access to telecommunications services, NCC said the MVNOs would help to drive government’s efforts to extend telecom services to more rural, under-served, and unserved communities across the country.
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 operators (MNOs). This means that the operators will not need investments in their infrastruc- ture but leverage existing facilities across the country to provide services.
According to the industry experts, by buying network capacity from Mobile Network Operators (MNOs), the MVNOs are able to swiftly rise in the market through a business model that passes these savings down to the consumer.
They added that the MVNOs could also offer a more tailored-made service versus MNOs, which tend to offer more of a generic service that suits the masses. With the release of the licensing framework, NCC said intending players could now acquire the MNVO licence at a fee ranging from N30 million to N250 million, depending on the type of tier.
The MNVO licence fee is far lower compared to that of the MNOs. MTN and Airtel recently paid N71.9 billion each to renew their Universal Access Services (UAS) licences for another 10 years
According to the NCC, Tier 1 operator pays N30 million; Tier 2 operator N65 million; Tier 3 operator N100 million; Tier 4 N150 million and Tier 5 N250 million. The tenure for the licence is pegged at 10 years with an option to renew the license for the same term.
Explaining the layers, NCC said Tier 1 operators are the Services Virtual Operators.
This tier leverages 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 is the Simple Facilities Virtual Operator, which 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 Intelligent Network (IN) to provide its own IN services to the customer. Tier 3 are Core Facilities Virtual Operators, which rely on its technical and commercial prowess to launch and operate a full core network with switching and interconnect capabilities.
Tier 4 are Virtual Aggregators/ Enablers, responsible for aggregating and/or enabling VO services within the market. It relies on a model in which it stands as a middleman between the MNO and multiple VOs. Tier 5 are Unified Virtual Operators. A VO within this tier can decide the level of service it desires to offer ranging from tier – 1 to tier – 4. This gives the VO freedom of choice to deploy its services the way it deems fit as long as it still has a valid licence.
