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NCC pegs MNVO licensing fees at N250 million, gives 10 year tenure

By Adeyemi Adepetun
24 March 2022   |   2:47 am
The Nigerian Communications Commission (NCC) has pegged the licensing fees for Mobile Virtual Network Operators (MVNO) between N30 million and N250 million, depending on the type of tier.

The Nigerian Communications Commission (NCC) has pegged the licensing fees for Mobile Virtual Network Operators (MVNO) between N30 million and N250 million, depending on the type of tier.

According to the NCC, Tier 1 operator pays N30 million; Tier 2 operator N65 million; Tier 3 operator N100 million; Tier 4 N150 million and Tier 5 N250 million.

In the ‘License Framework for the Establishment of Mobile Virtual Network Operators in Nigeria’, released by the commission on Tuesday, the tenure for the license is pegged at 10 years with an option to renew the license for the same term.

A MVNO is a telecommunications product and service operator that leverages the capacity of a fully Licenced Telecommunications Service provider or Mobile Network Operator (MNO). The MVNO reaches a “Wholesale Agreement” or “Revenue Sharing Agreement” with the telecommunications company through negotiations and delivers its services after bulk-purchasing resources from the telco.

The defining difference between an MVNO and an MNO is that the former has no ownership whatsoever of spectrum elements, irrespective of its operational model.

One of the major objectives of MVNO is to give the providers of virtual mobile communications services an opportunity to participate in the telecommunications provisioning market of Nigeria, with an emphasis on improving the telecommunication output of the country.

In terms of the roll-out, the licensee must ensure that its services are rolled out within 12 months of obtaining its license and is expected to stick to the terms of the agreement as stated in its business proposal and service delivery within the MVNO agreement with MNO.

According to NCC, the License is subject to revocation or suspension under the same conditions set within Condition 21 of the Unified Access Service license framework. The license can also be revoked or suspended if the licensee violates the MVNO agreement between itself and the MNO, or violates any of the conditions stated within this framework and the license can be revoked. If a licensee operates beyond the scope of the tier it has indicated and paid the license fees for.

Explaining the layers, NCC said Tier 1 operators are the Services Virtual Operators. This tier leverages 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 V.O for delivery of its products and services.

Tier 2 is the Simple Facilities Virtual Operator, which assumes more control of the value chain, which allows it to significantly differentiate itself from its host. The VO does not have Core Switching and Interconnect capabilities but can set up its own Intelligent Network (IN) to provide its own IN services to the customer.

Tier 3 are Core Facilities Virtual Operators, which relies on its technical and commercial prowess to launch and operate a full core network with switching and interconnect capabilities. Tier 4 are Virtual Aggregators/Enablers, responsible for aggregating and/or enabling VO services within the market. It relies on a model in which it stands as a middleman between the MNO and multiple VOs.

Tier 5 are Unified Virtual Operators. A VO within this tier can decide the level of service it desires to offer ranging from tier – 1 to tier – 4. 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.

For intending licenses, NCC said the criteria includes that licensee must be a corporate body registered under the laws in force in Nigeria with proof of same submitted to the Commission during application; licensees are to file with the Commission, the full contract agreement with at least a host network operator or a national carrier; licensee is obliged to show proof of financial capabilities to cover it’s CAPEX and OPEX for the implementation of its strategic operations; licensees must meet the technical requirements of the commission for operating within the tier of choice.