In July, Nigeria’s number of active Internet Service Providers (ISPs) dropped to 242 from 252 in May. This decline occurred as some operators failed to renew their licenses.
The Nigerian Communications Commission (NCC) updated its ISP database in July, showing that 12 ISPs let their licenses lapse in June. Despite this, two new firms, Sulfman Consulting Ltd. and NGCOM Lastmile Solution Ltd., received ISP licenses on July 1. The five-year licenses cost N500,000 and are renewable.
The NCC has expressed concern over the declining number of active ISPs. Many operators are not renewing their licenses, resulting in fewer active providers in the telecom market.
Challenges Faced by ISPs
Prof. Umar Danbatta, the former Executive Vice Chairman of the NCC, highlighted issues like anti-competition practices, inadequate spectrum, high bandwidth prices, and costly Right of Way as major challenges. As of March 2022, 568 licensed ISPs had become inactive.
ISPs have also struggled with competition from mobile operators, considered the industry giants. The launch of 5G by MTN and Airtel worsened the situation, causing some enterprise customers to switch to 5G routers.
MNOs Dominating Internet Service Provisioning
Mobile operators like MTN, Airtel, Globacom, and 9mobile are also ISPs under their Unified Access Service Licenses (UASL). Despite this, core ISPs, primarily local companies, focus solely on internet services. NCC data shows that as of Q1 2024, the leading ISPs had 262,206 active customers, while the four major mobile operators had 163.8 million internet subscriptions.
Call for Government Intervention
David Omoniyi, CEO of VDT Communications Limited, urged the government to support ISPs, emphasizing their role in achieving nationwide broadband. He noted that ISPs, classified as SMEs, are struggling and need targeted intervention to survive and continue providing services.
Omoniyi stressed the importance of addressing the issues hindering ISP growth, such as funding, the operating environment, and regulations that may favour larger players. He called for the regulator to promote smaller ISPs and prevent monopolies.
A recent NCC study highlighted the low ISP license renewal rates despite new firms entering the market. The study suggested regulated data price increases to help ISPs survive, noting that current data prices are artificially low due to intense competition.
