The telecommunications regulator, the Nigerian Communications Commission (NCC), has issued licences to 38 firms to operate as Internet Service providers in the country. New Telegraph gathered that the new telecom operators were licensed between January and October 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 187. However, not all of them are actively providing services as the stiff competition in the industry has forced many out of business.
The licence, which is acquired at a fee of N500,000, has a five-year tenure, after which the licensee can choose whether to renew or not. From the 38 licences issued so far this year, the telecoms regulator has realised a total of N19 million. According to the Director, Licensing and Authorisation, NCC, Mohammed Babajika, the deliberate efforts of the regulators towards achieving last-mile broadband connectivity led to the increase in the number of ISPs. He added that the country currently has huge bandwidth capacity, which has not translated to increased broadband penetration due to the last-mile challenge.
He, however, noted that with more ISPs being licensed, the service will get closer to the people. While the number of new ISP licensees for the year still stood 38 as of the time of filing this report, data released by the Commission for the last three years showed that more companies acquired the license in 2020. According to the data, 23 firms were licensed in 2018, while 39 licenses were issued in 2019. By 2020, 54 companies acquired the ISP licence. The rising number of ISPs is expected to boost the country’s broadband penetration target of 70 per cent by 2025. However, locations of the new service providers show that most are still concentrated in the urban areas, as the digital gap between urban and rural Nigeria continues to widen. The NCC’s data showed that the Internet Service Providers are concentrated in Abuja, Lagos and Port Harcourt.
The new service providers are coming amidst complaints by the old players over the stiff competition with the mobile network operators. The ISPs have been blaming the bigger operators, especially the likes of MTN, Globacom, Airtel and 9mobile for their woes as 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. While emphasising the role of the ISPs in the country’s quest for ubiquitous broadband, the Chief Executive Officer of VDT Communications Limited, Mr. David Omoniyi, had recently appealed to government to come to the aid of the business. According to him, the ISPs, who could be classified as small and medium enterprises (SMEs) in the telecoms market, are dying by the day.
“Indigenous ISPs are disappearing, more than 200 have been licensed so far by the Nigerian Communications Commission (NCC), but only a few of them are still operating. They are largely SMEs and need support to survive,” he said. Omoniyi added that the implementation of the National Broadband Plan 2020-2025 required the input of every stakeholder to succeed, hence the ISPs, which play significant roles in taking the services to the last mile must be supported. “We need to carry everybody along and one way is to keep the ISPs alive.
We need the majority of them around to keep employing people and to take the service closer to the people. There is a need for targeted intervention for them to survive,” he added. Meanwhile, 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 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.