The number of active Internet Service Providers in Nigeria has decreased to 242 in July from 252 in May this year, marking a notable decline as several operators allowed their licenses to expire without renewal, according to the latest data from the Nigerian Communications Commission.
The updated July database from the NCC revealed that despite two new firms, Sulfman Consulting Ltd. and NGCOM Lastmile Solution Ltd., obtaining ISP licenses on July 1, the overall number of ISPs contracted by 12 during June. The five-year licenses, costing N500,000 and renewable, continue to be a crucial requirement for operating in this sector.
In a recent statement, the NCC expressed concern over the persistent trend of ISPs failing to renew their licences, which has contributed to a dwindling number of active players in the telecom market segment.
Former NCC Executive Vice Chairman, Prof. Umar Danbatta, highlighted broader industry challenges, noting that as of March 2022, 568 licensed ISPs had become inactive due to issues such as anti-competitive practices, inadequate spectrum allocation, high bandwidth costs, expensive Right of Way fees, and governance issues within companies.
The launch of 5G services by major mobile network operators like MTN and Airtel has further intensified competition, leading some enterprise customers to switch from traditional ISPs to these new technologies.
Despite their role in providing specialized internet services, ISPs face an uphill battle against dominant MNOs like MTN, Airtel, Globacom, and 9mobile, which collectively reported 163.8 million active internet subscriptions in Q1 2024, overshadowing the 262,206 customers served by the leading ISPs.
David Omoniyi, CEO of VDT Communications Limited, a prominent ISP, urged government intervention to support smaller ISPs, emphasizing their crucial role in achieving nationwide broadband coverage under the National Broadband Plan 2020-2025. Omoniyi highlighted regulatory challenges that disproportionately favor larger operators, potentially stifling competition and innovation.
Meanwhile, a recent study by the NCC’s Emerging Technologies Research Unit advocated for a regulated increase in data prices to ensure the sustainability of ISPs, cautioning that current market conditions, marked by fierce price competition, threaten the viability of smaller operators.
As the industry grapples with these dynamics, stakeholders continue to call for regulatory reforms aimed at fostering a more equitable environment for all telecom players, ensuring sustainable growth and improved service delivery nationwide.
