REVEALED: Why NCC suspended the issuance of MVNO, IES and VAS licenses – Technology | Business

About a month ago, the Nigerian Communications Commission announced a temporary suspension of the issuance of Mobile Virtual Network Operator (MVNO), Interconnect Exchange Service (IES) and Value Added Service (VAS) Aggregator licenses.

But research by Techeconomy has uncovered reasons why the telecommunications regulator took the cautious decision to temporarily suspend the licenses.

According to several sources within the Commission, the NCC’s objectives in suspending the MVNO, IES and VAS aggregator licenses are:

“To ensure an effective ecosystem in the telecommunications industry. The suspension will also allow the Commission to thoroughly review several key areas within these categories and improve the industry’s competitiveness for growth.”

Our correspondent has seen a document reviewing the VAS aggregator licenses, which shows that NCC wants to scale up the aggregators to ensure that all “VAS operators (VAS content providers), regardless of their size, can easily integrate with MNOs.”

“Currently, the Commission has awarded a significant number of licenses in this category of services and it has become necessary to review the market dynamics of this sub-segment in order to ensure effective competition,” a source familiar with the matter confirmed to our correspondent.

“The Commission has also carried out a benchmarking exercise in some countries around the world and found that there may currently be more VAS aggregator licensees than required. There are currently forty-nine (49) VAS aggregator licensees in the country. There is therefore a concern of saturation as there is not enough market for the aggregators due to ‘oversupply’.

“This has also resulted in several aggregators struggling to connect with the four (4) Mobile Network Operators (MNOs),” the reliable source said.

With a technical knowledge of the review processes, she told Techeconomy that on the Interconnect exchange service, “Since assuming office as EVC of the NCC, Dr. Aminu Maida has consistently stressed his commitment to transparency and professionalism and that, as a responsive and proactive regulator, he has raised serious concerns about the issues surrounding Interconnect debtSIM boxesand call refiling.

“The original objective of introducing this category of license was to encourage interconnection of smaller players and reduce debt in the telecom sector. While these IES licensees have made a positive contribution to the interconnection of smaller operators, the problem of debt related to interconnection has persisted in the industry.

“Cases of SIM boxing and call refiling have also become a major problem affecting the licensees in this sub-segment as well as the MNOs that serve as major endpoints of voice traffic in Nigeria,” the source said.

Some of the licensees in this category reportedly also have other licensees for international traffic termination.

Some are suspected of abusing this for SIM boxing and call masking to terminate international traffic as local calls.

“In doing so, they are depriving operators of revenue that should normally go to them.

“There are currently thirty-seven (37) Interconnect Exchange Service licensees, routing traffic primarily to and from four major mobile network operators in the country.”

When asked about the Virtual mobile network operators The NCC started issuing licenses a few months ago and 43 companies have already received approval. The source said the commission is evaluating the market to see how it develops and how it performs.

When asked whether NCC could suspend the licensing, Niyi Oladapo, a telecommunications lawyer, said: Tech economy The Nigerian Communications Act of 2003 gives the Commission the power to grant and revoke licenses.

“Yes. The NCC reserves this power. The Commission’s power to grant and revoke licenses also includes the power to suspend the issuance of those licenses.”

What impact could this suspension have on the growth of the telecommunications industry?

Oladapo agreed that it has little to no effect.

“The Commission already has enough licensees in each of these categories to meet the needs of the industry. Also, remember that this is a liberalised industry.

“When a segment is saturated, you have to review it and address competition issues to reposition licensees to deliver better services. As the Commission, our role is to ensure that they remain competitive and can provide better services to the industry,” he said.

Meanwhile, our source at the NCC said the duration of the suspension would depend on the outcome of a review conducted in consultation with industry stakeholders.