The news:
- The number of active Internet Service Providers (ISPs) in the country has dropped to 242 in July 2024 from 252 in May 2024, according to the July updated database of ISPs published by the Nigerian Communication (NCC).
- This decline in the number of operators happened despite the issuance of ISP licences on July 1 to two new companies — Sulfman Consulting Ltd. and NGCOM Lastmile Solution Ltd.
- This indicates that 12 ISPs whose licences expired failed to renew them, causing them to lose them all in the last three months.
The renewable licence lasts five years per tenure and costs ₦500,000. While it might not seem like a lot of money, it now appears to be more than many operators in Nigeria can afford.
Recently, the NCC lamented the trend of several ISPs not renewing their licence, which has resulted in a continuous decline in the number of active operators in that telecom market segment.
Beyond financial challenges, providers are losing their licences for several other reasons.
Prof Umar Danbatta, the immediate past Executive Vice Chairman of the NCC, recently revealed that 568 licensed ISPs were made inactive by March 2022 majorly due to industry anti-competition practices.
As for other challenges confronting the Internet providers, Prof Danbatta also listed issues such as inadequate spectrum, high price of bandwidth, high cost of Right of Way, and lack of good corporate governance practice in the companies.
On the other hand, ISPs have maintained that competition between them and the mobile operators — considered the big players — is severe at best and unhealthy at worst.
While ISPs are mostly Indigenous firms licenced by the NCC to provide only Internet service, mobile network operators (MNOs), comprising MTN, Airtel, Globacom, and 9mobile, can also be considered ISPs as they provide Internet service in addition to voice and other services approved by their Unified Access Service Licence (UASL).
Some Industry analysts argue that the situation worsened with the launch of 5G by MTN and Airtel, which has led some enterprise subscribers to switch from ISPs to 5G routers.
So far, MNOs continue to control a dominant share of the Internet market. A recent ISP customer data published by the NCC revealed that the leading ISPs with a significant number of customers, all 106, recorded a cumulative 262,206 active customers in Q1 2024.
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In the quarter, the four MNOs, MTN, Airtel, Globacom, and 9mobile, had 163.8 million active internet subscriptions.
