Telecoms stakeholders have cautioned that many Mobile Virtual Network Operators (MVNOs) in Nigeria could struggle to survive unless they address infrastructure gaps, target niche markets, and adapt to local realities.
The warning came during the sixth edition of the Telecoms Sector Sustainability Forum, organised by Business Remarks in Lagos on Tuesday.
Participants noted that while 43 MVNOs have secured licences from the Nigerian Communications Commission (NCC), only a few of them have fully launched services.
Survival at risk
Chidi Ajuzie, Director of U.SK Mobile, predicted that only half of the licensed MVNOs may survive within the next five years. He stressed that licences alone are not enough to guarantee success, pointing out that operators must invest in infrastructure, understand market needs, and create tailored services.
“Too many people think that once you get a licence, the money will start rolling in. Without infrastructure and innovation, many MVNOs will die out quickly,” he said.
Ajuzie added that smaller players, especially those in lower tiers, will face significant financial pressure since they are expected to build part of their own infrastructure.
However, he noted that this also creates room for innovative business models.
Calls for niche markets
Other stakeholders urged Nigerian MVNOs to avoid competing directly with Mobile Network Operators (MNOs) and instead carve out niche markets.
They cited examples from South Africa and India, where MVNOs thrived by focusing on segments like youth, migrant workers, and fintech services.
- President of the Association of Telecommunications Companies of Nigeria (ATCON), Tony Emoekpere, said the NCC introduced multiple MVNO licence categories to liberalise the market and give consumers more options.
- He argued that MVNOs can only remain sustainable if they differentiate themselves in a market already dominated by MNOs offering internet, enterprise services, and fintech.
- He pointed to Kenya’s M-Pesa as an example of telecom-enabled innovation that transformed financial access for low-income and rural users. He also highlighted opportunities in Nigeria’s rural communities, where millions lack reliable telecom and financial services.
“Designing a low-data package for POS machines in rural areas could be a game-changer. These terminals do not need broadband; a simple 2G network can handle them,” he said.
Local realities and policy concerns
A Director at IPNX, Olusola Teniola, warned against replicating European or American MVNO models in Nigeria without adapting them to local realities. He noted that affordability, rural connectivity, and infrastructure challenges must be central to any strategy.
“The biggest market is not the flashy smartphone users in Lagos. The biggest market is at the bottom of the pyramid,” Teniola said.
He also cautioned that over-reliance on foreign-owned operators could lead to capital flight and weaken local innovation.
What you should know
Nairametrics earlier reported that 43 companies had spent a total of N8.6 billion to acquire the MVNO licences even amidst concern that the operators may have to struggle to acquire customers in a market already dominated by mobile network operators (MNOs) comprising MTN, Airtel, Globacom, and 9mobile.
The 43 MVNOs, based on contractual agreements, will be leveraging the infrastructure of the MNO to provide telecom services in unserved and underserved areas of the country.
This, however, raises more concern about capacity as the MNOs are currently finding it difficult to invest more in infrastructure due to the current forex challenge.
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