Nigeria's Internet Service Provider (ISP) sector has experienced a decline, with the number of active ISPs dropping from 252 in May to 242 in July, as reported by the Nigerian Communications Commission (NCC). This reduction follows several operators' expiration and non-renewal of licenses, despite two new firms, Sulfman Consulting Ltd. and NGCOM Lastmile Solution Ltd., receiving permits on July 1. The five-year ISP license, costing N500,000, has seen a decreased renewal rate, contributing to the dwindling number of active ISPs in the market.
Former NCC Executive Vice Chairman Prof. Umar Danbatta highlighted that, as of March 2022, 568 licensed ISPs had become inactive, citing anti-competitive practices, limited spectrum, high bandwidth costs, and inadequate corporate governance as primary challenges. The situation has been exacerbated by competition from mobile network operators (MNOs) such as MTN and Airtel, especially following their launch of 5G services, which has led to a migration of some enterprise customers to 5G routers. Consequently, while MNOs dominate with 163.8 million active internet subscriptions as of Q1 2024, the top 106 ISPs only had 262,206 active customers.
David Omoniyi, CEO of VDT Communications Limited, has called for government intervention to support ISPs, which he categorizes as SMEs in the telecom sector. Emphasizing their crucial role in the National Broadband Plan 2020-2025, Omoniyi stressed the need for regulatory reforms to create a more balanced competitive environment. The NCC's Emerging Technologies Research Unit suggested a controlled increase in data prices to sustain ISPs, as current low data prices, driven by fierce competition, threaten the viability of these smaller providers.
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