Temporary Suspension of Issuance of Communication Licence Not Linked to Industry Challenges

Emma Okonji

Contrary to speculations that the Nigerian Communications Commission (NCC) may have suspended the issuance of communications licences due to industry challenges, THISDAY investigation has revealed that the exercise was suspended temporarily in order to ensure the sustainability of the various players in the sector.

Another key factor, it was learnt, is to enhance the industry’s vibrancy for effective ecosystem, and enable the commission conduct a thorough review of several key areas within the categories of licences.

Last month, the NCC announced the temporary suspension of the issuance of three categories of communications licences, which includes: Value Added Services (VAS) Aggregator Licence; Interconnect Exchange Service Licence; and Mobile Virtual Network Operator (MVNO) Licence.

THISDAY gathered that NCC was not unmindful of the importance of the licences, given the interest of potential investors in the Nigerian telecoms space.

“The commission is on top of the industry and has undertaken the intervention to create a more conducive atmosphere for competition and ensure the survival of every player in the industry, “ a source at NCC said.

The Value Added Services (VAS) Aggregator licence, serve as the links between VAS Operators (VAS Content Providers) and Mobile Network Operators (MNOs). VAS Aggregators play a crucial role in the VAS ecosystem by facilitating seamless connection of VAS Operators (VAS Content Providers) to MNOs, thus streamlining the integration process of the VAS Operators to MNOs. The aggregators have the scale to ensure that all VAS Operators (VAS Content Providers), regardless of size, can easily integrate into MNOs.

Currently, the commission has issued a significant number of licences in this category of service, and there has arisen the need to review the market dynamics of the sub-segment to ensure effective competition.

The Interconnect Exchange Licensee facilitates the interchange of voice calls among networks. The original goal of introducing the licence category was to encourage interconnection for smaller players and reduce interconnect indebtedness in the telecom sector. While the Interconnect Exchange Service (IES) licensees have positively contributed to the interconnectivity of smaller operators, the issue of interconnect indebtedness has persisted in the industry.

Cases of SIM Boxing and Call Refiling have also become a major issue impacting the licensees in the sub-segment as well as MNOs that serve as the major terminating points of voice traffic in Nigeria.

Reports show that some of the licensees under this category also have other licensees to terminate traffic internationally. Some are suspected of abusing this for SIM boxing and Call Masking to terminate international traffic as local calls. With this, they take away revenue that should ordinarily accrue to the operators.

There are currently 37 Interconnect Exchange Service licensees transiting traffic mainly to and from four major MNOs in the country.

For the Mobile Virtual Network Operators licence, a significant number of licensees, about 43 have been granted and the NCC is currently assessing the market to see how it evolves and performs.

The Nigerian Communications Act 2003 gives NCC the power to grant and revoke licences. Inherent in the power of NCC to grant and revoke licences is also the power to suspend the issuance of different categories of licences.

NCC had explained that the temporary suspension of the issuance of the communication licences would have little to no effect on the growth of the telecoms industry, since it already has enough licensees in each of the categories to take care of the needs of the industry.

THISDAY investigation also revealed that in line with its principle of participatory regulation, the duration of the suspension would depend on the conclusion of a review that would be done in consultation with industry stakeholders.