The Nigerian Communications Commission (NCC) has issued licences to six firms to operate as Internet Service providers in the country. TechTrackAfrica gathered that the new telecom operators were licensed between January and February this year to boost the depleting number of players in that segment of the telecoms market.
With the new licensees, the total number of licensed ISPs in the country increased to 163. However, not all of them are actively providing services as the stiff competition in the industry has forced many out of business.
The newly licensed firms include Triotec Limited, which is based in Lagos; Iotech Global Hub Limited, also in Lagos; and Abuja-based Realife Telecommunication Limited. Others are Raglan Technologies Limited, Lagos; BUD Infrastructure Limited, Lagos; and OTU-B International Concept Ltd, which is based in Abuja.
Aside from the mobile network operators, the ISPs play critical roles in providing last-mile connectivity to people across cities, rural communities, and underserved communities and are key to achieving the country’s target of deepening broadband penetration. However, there had been a 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.
Meanwhile, 25 companies may exit the ISP business this year as their licences expire. The companies, whose five-year licensees expire this year have the right to renew for another five years with the sum of N500, 000 if they want to remain in the business. However, according to the NCC, the rate of license renewal by the ISPs has been very low. This suggests that many of the licensees exit the business once their licence expires.
While the number of ISPs in the country had consistently declined over the years, the operators have been blaming the bigger operators, especially the likes of MTN, Globacom, Airtel, and 9mobile for their woes. The operation of the mobile network operators in the retail data market with cheaper prices is said to be the bane of the ISP businesses.
The NCC in a recent study by the Emerging Technologies Research Unit of its Research and Development Department acknowledged that licence renewal rate of ISPs in Nigeria continues to drop, even as new firms take up the licence.
The researchers, therefore, called for a regulated increase in the prices of data to save the ISPs from dying. According to the study, there is currently a regime of “artificially low data prices” in the market due to stiff competition among the operators.
“To solve the issue of artificially low internet/data prices, a regulated minimum price level has to be put in place by the Government and the Commission, for both big and small telecom operators to compete on the quality of the network and customer services they provide,” the study recommended.
In the report of the study titled: “An Exploratory Study on the Challenges and Survivability of ISP Licensees in the Nigerian Telecom Sector,” the researchers said: “In view of the critical need of internet connectivity for the digital economy and mass digitalisation of Nigeria, the role of ISPs is central also for the uptake of the internet of things (IoT). The Study, therefore, undertook a detailed assessment of the challenges facing ISPs in Nigeria, and these were found to include: competition with MNOs offering ISP services, harsh business environment, inadequate National Broadband Infrastructure.”