Fresh Wave: Enhancing Nigeria's Telecommunications Sector Demands New Contenders for Competition
In recent years, Nigeria's telecom industry has witnessed a significant shift, with market leaders MTN and Airtel controlling an overwhelming 90% of the market share. This dominance has been detrimental to other players such as Globacom and 9mobile, whose market shares have fallen to 11% and 1.5% respectively.
The decline in Globacom's market share, which was once at 26%, can be attributed to an NCC audit that removed improperly registered and inactive SIMs. Poor customer service, deteriorating network quality, and underinvestment have been long-standing issues with Globacom, despite flashy promotions.
The absence of significant competition has led to high prices for consumers, a situation that is unlikely to change without new players entering the market. The telecom industry in Nigeria has been a sluggish duopoly for too long, leaving consumers with fewer choices, less innovation, and little incentive for incumbents to improve.
The exit of Etisalat, now 9mobile, in 2008 was a warning sign of what was to come for Globacom. Since then, no new mobile operator has entered Nigeria. However, the Nigerian Communications Commission (NCC) has issued over 40 Mobile Virtual Network Operator (MVNO) licences since 2022, but only two, Vitel Wireless and Lebara, are actively moving towards commercial launch.
Negotiations between MVNOs and Mobile Network Operators (MNOs) over network usage fees, revenue sharing, and service-level guarantees have been contentious and prolonged, preventing MVNO launch. Wole Adetuyi, CEO of Swift Telephone Network (STN), stated that new players are needed in the industry.
To reboot Nigeria's telecom industry, several key strategies have been proposed:
1. **Regulatory Frameworks**: Implement robust regulatory frameworks to drive innovation, manage infrastructure deployment, and ensure transparency in fund allocation and project monitoring. 2. **Infrastructure Development**: Encourage telcos to invest more in their network infrastructure, such as fiber and tower upgrades, and promote the use of advanced technologies like 5G and AI-driven maintenance to enhance network performance and customer experience. 3. **Market Inclusivity**: Introduce flexible licensing models that allow for new entrants and innovative service models, and ensure regulatory measures protect consumer interests while fostering competition. 4. **Attracting New Operators**: Offer incentives for new operators, such as tax breaks or subsidies for infrastructure development in underserved areas, and conduct thorough market research to identify gaps and opportunities for new entrants.
Successful strategies have been implemented in other countries such as South Africa and Morocco. In South Africa, open access networks have been successful, allowing multiple operators to share infrastructure, reducing costs and increasing coverage. Regulatory bodies in South Africa also actively promote competition by setting standards and pricing regulations that encourage new entrants.
Morocco, on the other hand, has focused heavily on developing its digital infrastructure, attracting foreign investment, and boosting its digital economy. Regulatory reforms have also simplified licensing processes and reduced bureaucratic hurdles for new operators.
The NCC has struggled with enforcing its framework to support MVNO entry, failing to hold MNOs accountable for timely and fair access. To overcome this, an implementation roadmap has been proposed, with short-term, medium-term, and long-term goals to ensure the success of these strategies.
By adopting these strategies, Nigeria can enhance its telecom sector, increase competition, and improve service quality. This is a crucial step towards providing better services to consumers and driving economic growth in the country.
- The decline in Globacom's market share highlights the need for investment in network infrastructure, innovation, and customer service to remain competitive in the Nigerian telecom industry.
- Robust regulatory frameworks that drive innovation, manage infrastructure deployment, and ensure transparency in fund allocation could potentially attract new finance and investors, bringing about further digital transformation in the industry.
- The implementation of flexible licensing models may provide opportunities for new business models and mobile virtual network operators (MVNOs) to enter the market, fostering healthy competition and offering customers more choices.
- Successful strategies like those seen in South Africa, Morocco, and other countries show promise for revitalizing Nigeria's telecom landscape, ultimately improving service quality and driving economic growth through increased competition.
