Ten months after, obtaining their licences, the Mobile Virtual Network Operators (MVNOs) in Nigeria, are yet to tap into the global MVNO market which has risen to $67.54 billion in 2020 and it is expected to reach $123.40 billion in 2028, LEADERSHIP has learnt.
This is even as MVNOs have listed profitability challenges, balancing competitiveness and sustainability due to limited pricing flexibility, fostering technological advancements innovation constraints among others, as challenges that have marred their rollout of services at unserved and underserved communities, across Nigeria.
As of June 2014, 943 MVNOs and 255 Mobile Network Operators (MNOs) sub-brands were active worldwide. This represents a total of almost 1,200 mobile service providers worldwide hosted by MNOs, up from 1,036 in 2012.
According to Fortune Business Insights, the global MVNO market size is projected to rise from $67.54 billion in 2020 to $123.40 billion in 2028, at a CAGR of 7.9 per cent during the forecast period, 2021-2028.
In Nigeria, the Nigerian Communications Commission (NCC) has so far licensed 43 companies as MVNOs and they are expected to start rolling out their services within one year of obtaining their licences. It is anticipated that the entry of the MVNO, which would use the MNOs’ current infrastructure, will result in competitive offerings in the telecom sector and reduced call and data rates for customers, especially in rural areas.
The first set of MVNOs got their licences in April, 2023, but are yet to roll out their services due to uncertainty in the business terrain.
Meanwhile, IT experts who spoke with LEADERSHIP at a MVNO conference organised by Wireless Technology Labs (WTL) in Lagos, recommended that licensed MVNOs should avoid using voice and data as their primary revenue streams since doing so may prevent them from turning a profit.
Offering a variety of Value-Added Services (VAS) that the MNOs do not currently offer is the way forward for MVNOs in Nigeria, they claimed, even as they disclosed that a large number of Nigerians may not want to switch to MVNOs for the same services as they are already subscribers to MNOs’ phone and broadband services.
The chief executive officer of WTL, Mr Satya Mekala, said VAS are services that add value to the lives of citizens such as health, education and agriculture, among others, adding that MVNOs in other climes became profitable by offering VAS and not from data or voice services.
“MVNOs examine a specific issue inside a specific market, such as education, agriculture, or isolated rural regions. They see it as a commercial opportunity, offer solutions, and generate revenue. Because they have grown to be extremely wealthy and powerful, MNOs are not acting in that way. Voice revenue is rather minimal for MVNOs, but VAS revenue is very profitable for them,” he explained.
Speaking on the idea behind the conference, WTL’s CEO averred that, the conference was organised to offer MVNO core network elements supporting voice and data across 2G, 3G, 4G and 5G network through containerized architecture, adding that MVNOs, through collective expertise can navigate challenges, build a profitable business and provide VAS that are important to the people and the country.
“MVNO is an advantage to the country because of the innovative solution it provides in areas of challenge such as education, agriculture, rural development among others. Such innovations are of advantage to a country because it provides opportunities for a country and business opportunities for MVNOs.
“MVNOs do not think of making money out of voice, they think of making money from several beautiful ideas like education. That is the value added services which are important for the country and its people and they will get access to education at a cheaper price through offerings of MVNOs. Through the offerings, access to education will improve, talent will be discovered and the country’s economy will improve,’’ he said.
Mekala however urged the government to provide subsidies, make the policies that would encourage companies to come and invest so as to connect the unconnected population.
In the same vein, the vice president, TecnoTree, Himmat Gill, said MVNOs can only survive through market differentiation. “Market differentiation can serve as a potent strategy for MVNOs to overcome the challenges of low revenue and competition from the MNOs. BY distinguishing themselves from competitors, MVNOs can attract and retain customers,” he said.
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