The Nigerian Communications Commission (NCC) has suspended accepting new applications for MVNO (mobile virtual network operator), a wireless communications services provider that does not own the wireless network infrastructure over which it provides services to its customers.
“This temporary suspension is necessary to enable the commission to conduct a thorough review of several key areas within these categories, including the current level of competition, market saturation and current market dynamics. The public is invited to note that during the suspension period commencing on 17 May, new application for the aforementioned licences will not be accepted.”
For NCC, this is a good call since the core value proposition of MVNO in Nigeria remains foggy. MVNO works in markets where major telcos over invest on capacities, and then wait for customers to come along. In other words, you build a system which can serve 1000 people but you have currently 500 people in the system. To handle the investments, you will be happy to welcome minor players which can help you find those extra 500 people.
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Those minor players may have regional affinity, niche customer services, and other things which can differentiate them, and in the process they can onboard new telco customers as their own, even though your network powers everything. In the US, you have Cricket Wireless, Safelink, etc, operating under AT&T and Verizon infrastructures.
But in Nigeria, I do think our core telcos are operating at over-capacity. In other words, if they have built for 500 customers, they possibly have 2,000 using them, thereby creating a scenario where MVNO makes no sense.
Why should adding more customers be a playbook when existing customers cannot enjoy decent services. Whenever I am in Nigeria, I get all the three core SIMs but even with that, it is alway a struggle once you are out of Abuja and Lagos. In a situation where the focus should be expanding core capacity, giving licenses to pad more frustrated customers whose calls or data cannot get through will not make sense. For that, this NCC call is solid!
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Why did NCC think it was worthy of consideration in the first place, is it because it’s applicable elsewhere or it felt there’s capacity to accommodate such here? There are things we shouldn’t even concern ourselves with, if only we can think things through. What we often do is to start what doesn’t need starting, and then we pause, and then get commended for pausing. We have perfected the art of wasting time on non essentials.