NCC May Revoke 115 ISPs Licenses, As 24 Others Due For Renewal

EXCEPT their current operational status are known, about 115 Internet Service Providers (ISPs) operating in the country risk being declared illegal operators by the Nigeria Communications Commission (NCC). The revocation of their operating instrument by the regulatory body may be carried out on the heels of the expiration of licenses belonging to about 24 others before the end of the year. The expired licenses are expected to be renewed before the end of the year.

The service providers are, by the provision of the Nigerian Communications Act, 2003 (NCA 2003), licensed for a period of five years before they are renewed.

Though, Nigeria has about 184 ISPs, 115 of them are expected to update the commission with their current business contacts/addresses before the end of March, in order to ensure seamless correspondences.

Besides, 22 other ISPs are to renew their licences in 2016; 18 in 2017 and by 2018 and 2019, 21 and 20 others are to renew theirs respectively. The 184 ISPs operate in different parts of the country and have helped in making Internet services readily available to individuals, businesses and governments.

Through their various activities, they have also helped in deepening Internet penetration, from less than 20 million to about 78 million people online, in the past five years.

Apart from the ISPs that are to be renewed in 2016, three Global System for Mobile Communications (GSM) operators would also renew their 15-year old licences.

The GSM operators include MTN, Airtel and Mobile Telecommunications Limited (MTEL), the mobile arm of the Nigerian Telecommunication Limited (NITEL). Of the three companies, only MTEL has been dormant in its operations, but the just concluded privatization activities for its turnaround by the National Council for Privatization (NCP), may as well bring it back to life. The renewal will allow the ISPs and the GSM companies to be able to continuously provide services to their subscribers.

As at press time, it was still very difficult to establish how much the renewal will generate for the regulator, but it was learnt that the exercise would offer another stream of revenue to government.

Recall that each of the GSM operators paid a licensing fee of $285 million (about N51.3 billion currently) to pick their licences, following the historic 2001 Digital Mobile Licence (DML) auction, conducted by the country’s telecoms regulator.

Specifically, the three operators picked their licences on February 9, 2001 and they are expected to apply for renewal by February 18, 2016. Other GSM operators such as Globacom and Etisalat will renew their licences in August 2017 and March 2022, respectively.

According to the Director, Policy Competition and Economic Analysis at NCC, Ms. Josephine Amuwa in an advertorial, those 115 ISPs are reminded of their licensing obligations with respect to information pursuant of sections 64 to 66 of the Nigerian Communications Act 2003.

Amuwa said the commission might be compelled to declare those who do not respond as illegal operators.

Investigations revealed that most of the ISPs refused to be connected to the country’s Internet Exchange Point (IXP), which to a greater extent has continued to make Internet services costly and even as services continue to be erratic.

A reliable source in the industry told The Guardian that some ISPs in the country still depend on Internet hubs that are located outside the country, in places like the United States of America; Israel and some parts of Europe.

According to him, this means that Internet traffic from Nigeria goes directly to these foreign hubs, thereby causing serious capital flight in form of transit charges paid to foreign ISPs by some of their Nigerian counterparts.

According to findings, only 37 of the 184 IT service providers in Nigeria are currently connected to the IXPs. The country currently has three IXPs, situated in Lagos, Port Harcourt and Abuja, with plans to commission two new ones in Kano and Enugu before the end of the year at the estimated cost of N35 million each.

An IXP is a physical infrastructure through which ISPs exchange Internet traffic between their networks (autonomous systems).

The function of an IXP is to reduce the portion of an ISP’s traffic, which must be delivered via their upstream transit providers, thereby reducing the average per-bit delivery cost of their service.

Analysts have stressed that one of the most cost effective ways of managing Internet traffic in any country is to ensure it is kept within the nation to avoid the global imbalance in the global telecommunications connectivity.

Speaking on the issue, the President of the Association of Telecommunications Companies of Nigeria (ATCON), Lanre Ajayi said majority of the ISPs, especially the big players are connected to the exchange. He said that due to the vicissitudes of the business environment, larger percentages of them are no more in operation.

He said there was need for government to create a favourable environment for business growth, adding that it was important to woo investors into the economy, “especially now that the country plans to develop its broadband potential”

To Kehinde Aluko, a telecoms expert, the ISPs may continue to shun the local exchanges because of the country’s under-developed distribution networks, which include national long distance fibre, metro fibre and last mile connectivity, which constitute a huge challenge, especially because of the cost implications.