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Broadband: Nigeria’s service providers shrink as 4 firms exit

.17 more licenses to expire this year

The poor rate of license renewal for internet service provisioning in the country continues to take its toll as four more companies exited the business in the last one month. Tech Track Africa gathered that the companies whose operating licenses expired March 31 failed to apply for renewal and have been expunged from the list of active service providers.

With this, the number of Internet Service Providers (ISPs) in the country, which was at one time over 170, has shrunk to 109. This was in spite of new firms acquiring operating licenses. Last year for instance, this paper’s checks showed that 27 new companies were licensed as ISPs, while four new were added this year. The number of new licenses is however not as much as that of old players that are exiting the business.

In the current drive of the country to deepen broadband access, the ISPs play critical roles in providing last mile connectivity to people across cities, rural communities, and underserved communities. However, there has been a continuous slide in the number of active ISPs present in the market and the scope of services they offer, a situation that has raised serious concerns among industry stakeholders and the regulator.

Last year, many of the service providers whose licenses expired did not renew and ceased to be counted as ISPs. Four more companies also joined the league in the last one month as they failed to renew their licenses. The companies that have just been removed from the list of active service providers by the Nigerian Communications Commission (NCC) include Micabe Services Limited; West Atlantic Computers Limited; First Wave Networks Limited; and Winrock Nigeria Limited.

Meanwhile, out of the remaining 108 service providers, the license of 17 of them will expire this year. While the five-year license is renewable, the poor rate of renewal that has characterised the business over the years may see majority of the companies exit the business upon expiration of their license this year.

The ISPs over the years have come under serious pressures from the Mobile Network Operators (MNOs) who are regarded as the big players but are also playing in the ISP space as their Universal Access Service Licence (UASL) also permits them to do so. The intense competition coupled with other operational challenges such as increasing capital and operational expenditure have been cited as the bane of the ISPs in the country.

But the President of Association of Telecommunications Companies (ATCON) Olusola Teniola in his reaction to the challenges facing ISPs expressed the belief that that ISP business is still viable in Nigeria, noting that what the operators need to do is to change their business approach and focus on niche areas of the market that are not threatening to the (MNOs). According to him, the MNOs are not to be blamed since there is no policy limiting them from offering same services as ISPs. Teniola also urged the government to remove several obstacles impeding telecoms growth in the country such as multiple taxation, Right of Way challenge, noting that ISPs will survive if all these challenges are fully addressed.

Admitting that the licenses are indeed facing some challenges, which have been preventing them from renewing their licenses, NCC had at a recent forum urged the service providers to channel all their grievances to the regulator with a view to finding solutions. NCC’s Director of Licensing and Authorisation, Ms Funlola Akiode, while addressing the service providers said aside from non-renewal of licenses, those who renew often delay in doing so. “Another important concern is in the area of licence renewal. We also observed the issue of delay in licence renewal by licensees whose licences have expired or about to expire.  They erroneously relied on the aspect of the licence document which states that their licence would be automatically renewed. I wish to reiterate that renewal of expired licence is not automatic but subject to fulfilment of obligations such as being up to date in payment of AOL, development and publication of approved Individual Consumer Code of Practice, updated type approval of telecoms equipment, payment of spectrum and numbering where applicable etc.,” she said.

According to her, while the Commission was also aware of some of the challenges confronting the licensees and has been working assiduously to address them, it was also open to hear more from the operators on their operational challenges.



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