60% located in Lagos
The number of companies providing internet service in the country rose significantly as 23 new firms acquired operating license between January and September this year. This came amidst challenges that have seen many operators exited the business in the last few years. According to the Nigerian Communications Commission’s database, the new licensees brought the total number of Internet Service Providers (ISPs) in the country to 135. Aside from the mobile network operators, the ISPs play critical roles in providing lastmile 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. According to NCC, the current number of service providers, despite new licensees, is still lower than the over 170 recorded in about 10 years ago. Last year, for instance, this newspaper’s checks showed that about 20 new companies were licensed as ISPs. However, the exit of old players continues to take a toll on the number of active service providers.
The newly licensed companies to provide internet service include, SOL Global Link Network Ltd, Corridor Communications Limited, Barnksforte Technology Limited, Air-Wifi Cyberspace Limited, TIS Lagos Limited, Wifrica Data Solutions Limited, Ascom Net Int’l Limited, AFR-IX Data Communications Limited, Informacial Media International Limited, Flexfinity Media Limited, and Bryantel Technologies Limited. Others are Partner Mobile Limited, Infratel Limited, Hoop Telecoms Limited, Elitel Universal Mobile Communications Nig Ltd.,Stratepro Veritas Technologies Limited, Instaport Technology Limited, Crossatlantic Cables Ltd, Disc Media & Telecoms Limited, Paribas Communications Limited, Kiwi Tech & ICT Services Ltd, E-Concept Technologies Ltd, and Chapman Computers Nigeria Ltd.
While the country’s internet penetration plan is to ensure access across the federation, a look at the locations of the licensed ISPs showed that the business is still skewed towards cities to the detriment of rural areas. Out of the 23 companies so far licensed this year, 14 of them, representing 60.8 per cent, are providing service in Lagos, while seven of them are in Abuja. NCC’s record show that one of the companies is located in Calabar, while one is in the capital of Plateau State, Jos. While the ISP licence is issued by NCC at a fee of N500,000 subject to renewal at the same fee every five years, the telecoms regulator said it has consistently recorded low rate of renewal by the operators, leading to a decrease in the number of players in the segment.
To address the issue, NCC recently had a meeting with the ISPs in Lagos where it expressed concern over their inability to meet up with their licensing obligations and poor rate of license renewal. Speaking at the meeting, which was aimed at addressing issues confronting the licensees, NCC’s Director of Licensing and Authorisation, Ms. Funlola Akiode, said the Commission was disturbed by non-compliance with rules by some of the operators, hence the need for the meeting.
Akiode added that the Commission also observed that the licensees were not complying with obligations such as approved Individual Consumer Code of Practice (ICCP), Type approval of equipment, submission of statistical data, and informing the Commission on their change of address. “Another important concern is in the area of licence renewal. We also observed the issue of delay in licence renewal by licensees whose licences have expired or about to expire. They erroneously relied on the aspect of the licence document, which states that their licence would be automatically renewed.
“I wish to reiterate that renewal of an expired licence is not automatic, but subject to fulfilment of obligations such as being up to date in the payment of AOL, development, and publication of approved Individual Consumer Code of Practice, updated type approval of telecoms equipment, payment of spectrum and numbering where applicable, etc.”
she said. According to her, while the Commission is also aware of some of the challenges confronting the licensees, it has been working assiduously to address them. The ISPs, over the years, have come under serious pressures from the Mobile Network Operators (MNOs) who are regarded as the big players, but are also playing in the ISP space as their Universal Access Service Licence (UASL) also permits them to do so. The intense competition, coupled with other operational challenges such as increasing capital and operational expenditure has been cited as the bane of the ISPs in the country.