NCC, CAC Tighten Rules On Telecom Ownership Changes, Require Prior Approval

The Nigerian Communications Commission (NCC) and the Corporate Affairs Commission (CAC) have introduced stricter compliance measures requiring telecommunications companies to obtain regulatory approval before effecting significant changes in their ownership structure.

Under the new directive, any transfer of shares amounting to 10 per cent or more in a company licensed by the NCC must secure a Letter of No Objection from the telecom regulator before the transaction can be registered by the CAC.

The requirement, which takes immediate effect, was jointly announced by both agencies in a statement issued on Sunday, marking a major regulatory shift for telecom operators and investors.

According to the statement, the directive is backed by Section 90 of the Nigerian Communications Act 2003, Regulation 28(2) of the Competition Practices Regulations 2007, and Regulation 42 of the Licensing Regulations 2019, which empower the NCC to review and monitor transactions involving its licensees.

The agencies said the requirement also applies to multiple share transfers that collectively exceed the 10 per cent threshold.

“Effective immediately any proposed transfer of ownership or control of shares in a licensee of the Nigerian Communications Commission, amounting to ten percent (10%) or more of the total share capital, as well as any series of share transfers which in aggregate exceed ten percent (10%) of the total share capital of the Licensee shall require a Letter of No Objection from NCC for the changes to be effected and registered with the CAC,” the statement said.

Under the new framework, the CAC will reject applications involving such ownership changes unless they are accompanied by evidence of prior approval from the NCC, effectively creating an additional layer of regulatory scrutiny for major transactions in the sector.

The two agencies said the measure was introduced to strengthen market discipline, preserve competition and prevent ownership changes that could lead to anti-competitive practices within the telecommunications industry.

“The requirement is designed to preserve a fair and competitive market structure within the communications sector by preventing direct or indirect anti-competitive practices, while strengthening regulatory oversight of significant changes in ownership and control,” the statement added.

Beyond competition concerns, the regulators said the directive would enhance transparency, improve investor confidence and provide greater regulatory certainty for stakeholders in the telecommunications sector.

They noted that stronger oversight of ownership changes would help protect the long-term stability and sustainability of the industry, which remains a key driver of Nigeria’s digital economy.

The NCC and CAC also reaffirmed their commitment to closer collaboration in ensuring orderly growth and effective regulation of the communications ecosystem.

“Both agencies will continue to work closely to promote regulatory certainty, ensure fair market practices, and support the orderly and sustainable development of Nigeria’s Communications Sector,” the statement said.

The Nigerian Communications Commission (NCC) and the Corporate Affairs Commission (CAC) have introduced stricter compliance measures requiring telecommunications companies to obtain regulatory approval before effecting significant changes in their ownership structure.

Under the new directive, any transfer of shares amounting to 10 per cent or more in a company licensed by the NCC must secure a Letter of No Objection from the telecom regulator before the transaction can be registered by the CAC.

The requirement, which takes immediate effect, was jointly announced by both agencies in a statement issued on Sunday, marking a major regulatory shift for telecom operators and investors.

According to the statement, the directive is backed by Section 90 of the Nigerian Communications Act 2003, Regulation 28(2) of the Competition Practices Regulations 2007, and Regulation 42 of the Licensing Regulations 2019, which empower the NCC to review and monitor transactions involving its licensees.

The agencies said the requirement also applies to multiple share transfers that collectively exceed the 10 per cent threshold.

“Effective immediately any proposed transfer of ownership or control of shares in a licensee of the Nigerian Communications Commission, amounting to ten percent (10%) or more of the total share capital, as well as any series of share transfers which in aggregate exceed ten percent (10%) of the total share capital of the Licensee shall require a Letter of No Objection from NCC for the changes to be effected and registered with the CAC,” the statement said.

Under the new framework, the CAC will reject applications involving such ownership changes unless they are accompanied by evidence of prior approval from the NCC, effectively creating an additional layer of regulatory scrutiny for major transactions in the sector.

The two agencies said the measure was introduced to strengthen market discipline, preserve competition and prevent ownership changes that could lead to anti-competitive practices within the telecommunications industry.

“The requirement is designed to preserve a fair and competitive market structure within the communications sector by preventing direct or indirect anti-competitive practices, while strengthening regulatory oversight of significant changes in ownership and control,” the statement added.

Beyond competition concerns, the regulators said the directive would enhance transparency, improve investor confidence and provide greater regulatory certainty for stakeholders in the telecommunications sector.

They noted that stronger oversight of ownership changes would help protect the long-term stability and sustainability of the industry, which remains a key driver of Nigeria’s digital economy.

The NCC and CAC also reaffirmed their commitment to closer collaboration in ensuring orderly growth and effective regulation of the communications ecosystem.

“Both agencies will continue to work closely to promote regulatory certainty, ensure fair market practices, and support the orderly and sustainable development of Nigeria’s communications sector,” the statement said.