Mistrust, greed stall take-off of new telephony licensees in 31 states

Over a year after 43 operators secured mobile virtual network operation licences with a commitment to bridging the rural telephony gap, the commercial agreement seems to have stalled the take-off of the scheme.• ALTON says all agreements must be completed before activationOver a year after 43 operators secured mobile virtual network operation licences with a commitment to bridging the rural telephony gap, the commercial agreement seems to have stalled the take-off of the scheme.

If the virtual operators do not find the footing to take off as expected, they would have to forfeit the N8.6 billion initial investment paid for their licences in March last year. They are to provide value-added services to customer segments not fully served by the incumbent operators, especially in remote rural areas.As it is, the market segment, which the MVNOs should attend to, the rural areas may not witness the revolution on time.

Under the MVNO framework released by the NCC, there are five categories of operators in this segment covering Tier 1 to Tier 5. According to the licensing framework, the highest in the categories, the Tier 5 licence costs N500 million, while Tier 4 goes for N200 million. Both the Tier 3 and Tier 2 licences cost N130 million and N60 million respectively, while the Tier 1 licence is to be issued at N35 million.

There are, however, operational differences between the 5 tiers. For instance, Tier 1 operators are the Services Virtual Operators. This tier is expected to leverage 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 VO for the delivery of its products and services.

Tier 5 are Unified Virtual Operators. A VO within this tier can decide the level of service it desires to offer ranging from tier1 to tier4. This gives the VO freedom of choice to deploy its services the way it deems fit as long as it still has a valid license. “So, even though everything is concluded, to the fact that we have employed staff, paying subscription to some technology platforms, we should have gone live about six months ago, but we couldn’t go live because it is MNO stuff!”

“Imagine the fintechs coming and saying they want to do the same model a GTB did or is doing including opening branches all over the country and boasting about 1000 branches. No fintech will survive because they cannot match them. However, the MVNOs are coming with some kind of disruption in the market, which may unsettle the telecoms operators, especially the dominant players. The coming of MVNOs will liberalise that space and democratise choices, people would have options.

Airtel Globacom MTN Mvnos Telephony Licensees

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