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Challenges And Opportunities: The Struggles Of Nigeria’s Mobile Virtual Network Operators

November 6, 2025
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Home Telecommunication

Challenges And Opportunities: The Struggles Of Nigeria’s Mobile Virtual Network Operators

November 6, 2025
Reading Time: 3 mins read
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Two years after the Nigerian Communications Commission (NCC) issued licenses to 43 Mobile Virtual Network Operators (MVNOs) to enhance telecom competition and improve connectivity, only one company, Vitel Wireless, has successfully begun commercial operations.

This slow rollout has raised concerns about the effectiveness of Nigeria’s MVNO framework in a market traditionally dominated by established Mobile Network Operators (MNOs) such as MTN, Airtel, Globacom, and 9mobile.

The NCC had anticipated that introducing MVNOs under a tiered licensing approach would promote innovation, expand consumer options, and foster inclusivity, particularly in underserved regions. However, the current situation indicates that regulatory approval alone cannot surmount the market’s structural and economic challenges.

Initially, there was enthusiasm for the licensing process, but many licensed companies have encountered hurdles in securing funding, negotiating wholesale agreements with MNOs, and crafting competitive offerings.

According to Nairametrics, the primary challenge facing many licensed MVNOs is a lack of financial resources, which has severely impacted their rollout plans. An anonymous executive from one of the licensees expressed frustration with the rapid deterioration of macroeconomic conditions shortly after acquiring their license in 2023.

“We had our plans ready and received investment commitments, but the economy took a turn, disrupting all projections. Those who promised us funding backed out due to scepticism,” the executive stated.

He mentioned that the licensed MVNOs also faced resistance from MNOs, who were hesitant to share capacity, fearing increased competition. While the NCC has intervened to address some of these concerns, securing funding remains a challenge.

In contrast, a high-ranking industry executive challenged the MVNOs’ claims, arguing that many had obtained their licenses without concrete business plans. “The main issue is that numerous applicants pursued licenses without a solid understanding of the telecom business. Now that they have the licenses, they’re realising that it’s not as straightforward as they thought,” he remarked.

Chidi Ajuzie, Director of U.SK Mobile, emphasises that the difficulties confronting Nigeria’s MVNO ecosystem extend well beyond regulatory issues. Many investors entered the telecom space expecting quick profits without fully comprehending the technical and financial challenges involved.

“Many believe that obtaining a license equates to immediate financial success. However, without appropriate infrastructure and innovation, most MVNOs will not survive,” Ajuzie stated. He predicts that only half of the licensed MVNOs could thrive over the next five years due to the fierce competition and the capital-intensive nature of building even partial infrastructure.

According to him, lower-tier MVNOs, which depend heavily on MNOs for connectivity, struggle with limited control over service quality and pricing. In contrast, higher-tier operators must invest heavily in their infrastructure, including core networks and billing systems.

“Smaller players, particularly those in lower tiers, will face substantial financial burdens since they need to establish part of their infrastructure,” he added.

Despite these challenges, Ajuzie sees innovation potential, especially among operators that cater to niche markets tailored to Nigeria’s diverse demographics and economic conditions.

Industry stakeholders largely agree that Nigerian MVNOs will face difficulties if they attempt to compete head-to-head with established MNOs on voice and data pricing. Instead, they should focus on identifying niche opportunities in segments that large telecoms have historically overlooked.

Drawing on markets such as South Africa and India, experts note that successful MVNOs often focus on targeted demographics, including youth, migrant workers, small and medium-sized enterprises (SMEs), and fintech-driven services. For example, in India, some MVNOs have prospered by integrating mobile services with microfinance and payment solutions, thereby creating new value chains rather than duplicating traditional telecom models.

Tony Emoekpere, President of the Association of Telecommunications Companies of Nigeria (ATCON), noted that the NCC’s multi-tier licensing strategy was precisely intended to foster such innovation. “The NCC introduced multiple MVNO license categories to liberalise the market and offer consumers more choices,” Emoekpere explained.

Nonetheless, he cautioned that sustainability will hinge on differentiation. “MVNOs can only remain viable if they set themselves apart in a market already dominated by MNOs providing internet, enterprise, and fintech services.” He cited Kenya’s M-Pesa as an example of telecom-enabled financial innovation that has enhanced inclusion for low-income users, suggesting that Nigeria’s MVNOs could achieve similar success by exploring innovative offerings.

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