Nigerian mobile market set for shakeup from new MVNOs

…Nigeria’s mobile ecosystem is about to change as new mobile virtual network operators (MVNOs) like Vitel Wireless prepare to launch services in the coming months.

Nigeria’s mobile market is set for change as the first-ever mobile virtual network operators (MVNOs) prepare to roll out services in 2025.

MVNOs have become popular in countries like South Africa, Senegal and Kenya, and experts believe the Nigerian market is ripe for growth.

Data from ICT market research firm Africa Analysis shows that at the end of 2023 the Africa Region had about 10.6 million MVNO subscribers, making up a very small portion of the overall mobile market, but forecasts show subscribers will grow to 19 million by 2028.

Nigeria’s telecom market is well covered by four mobile network operators (MNOs) – MTN, Airtel, Glo and 9Mobile – which have a combined 165 million subscribers, but there are currently no MVNO options.

In 2023, the Nigerian Communications Commission (NCC) began giving out MVNO licenses as a way to amplify service coverage, particularly in unserved and underserved regions.

So far, the NCC has licensed 46 MVNOs across five tiers with new licensees gearing up to launch.

First MVNO Vitel Wireless plans Q2 entry

Vitel Wireless told Connecting Africa it will be the first Nigerian MVNO to launch, sometime in the next three months.

Vitel’s network was built by Wireless Technology Labs (WTL) which has already completed the integration of Vitel’s infrastructure with the network of a major Nigerian MNO and has also enabled international roaming using its proprietary advanced core systems.

“We are going to be offering innovative solutions beyond what the big four operators who have dominated Nigeria’s telecoms market are currently offering. We are investing heavily in our operations, and our work with WTL will enable us to launch by Q2, 2025,” Kenneth Nwabueze, Vitel Wireless CEO, told Connecting Africa.

Headquartered in Lagos, Vitel received a Tier-3 license from the NCC in 2023, and its network is ready to launch as soon as the NCC approves its network and operational model.

Nwabueze said that WTL was able to deliver the Vitel network within just a few weeks after other suppliers said they would need six months or more.

The network will go live in Nigeria’s major cities first and then expand nationwide.

Vitel is also building experience centers in Lagos, Abuja, Enugu, Port Harcourt and Kano where customers can purchase SIM cards.

In addition, it is building a distributor network with SIM cards available through retail channels and online subscriptions using eSIMs.

The company said its pricing will be competitive for basic services like voice, SMS and data, and the MVNO will also focus on value-added services (VAS) like location-based services (LBS) and the Internet of Things (IoT). 

WTL’s African operations

WTL is an equipment vendor which is currently working with Nigerian MVNOs as they prepare to launch.

The Belgium-headquartered company has been active in Nigeria and across Africa for more than 20 years, working with operators of all sizes to roll out both urban and rural networks.

WTL enabled the networks of two of the 46 new licensed MVNOs and recently announced a partnership with Nigeria’s first mobile virtual network enabler (MVNE) MobileCoreX (MCX) which has a Tier-4 license.

Satya Mekala, CEO of WTL, told Connecting Africa that MVNOs bring unique opportunities for consumers and can offer VAS which MNOs don’t offer.

“MNOs cannot move as fast as a small, agile company, and also it may not be financially interesting to them, but for a small company with lower costs it is far easier to go and launch niche services,” he explained.

“An MVNO can go to a niche market, for example farmers – if you have several million farmers, they can create a closed user group and give very specific solutions for them,” he added.

There are also opportunities for MVNO services aimed at the education or financial services sector, or offering data-only SIMs or roaming SIMs.

“There are several ideas, and each idea has its own business case. So based on that, the investment will be different, the running out of the opex will be different, and the access to the market will be different. So, these are the things which a small company can do when innovative ideas pop up,” he added.

^{Satya Mekala, WTL CEO. (Source: WTL)}

When it comes to WTL, Mekala said the company had invested in Nigeria and has a local team of technical, project management, and sales employees who understand the “local nitty-gritty” of how a network needs to be delivered.

“We also understand and sympathize with the challenges for the local new MVNOs. I’ve been an MVNO myself, so I understand. We help them end-to-end on every step of the way,” he added.

He tried to dispel the misconception that MVNOs are “second class” telcos and said these businesses run as full mobile operators with the exception that they don’t have their own radio access network and need to partner with MNOs for that.

“The advantage of an MVNO is sharing other people’s infrastructure to reduce the cost to the end-user,” Mekala said.

Nigerian MVNO growth opportunity

Yaron Assabi believes Nigeria has the potential to become one of Africa’s most dynamic MVNO markets.

Assabi is the founder of South African-headquartered company MVNE (which stands for mobile virtual network enabler but is also the company’s name) which is an infrastructure and technology partner that makes launching and running MVNOs possible.

Assabi believes Nigeria is one of Africa’s most promising mobile markets, with a young, tech-savvy population of over 230 million.

“While the MVNO market is still in its early stages, it holds immense potential to drive innovation, enhance service delivery, and expand digital inclusion,” he told Connecting Africa.

MVNE is part of Digital Solutions Group (also founded by Assabi) which supports partners in South Africa, Namibia, Kenya, Ghana and Tanzania.

“We are actively expanding our footprint across West and East Africa, and Nigeria is a major strategic focus for us in 2025 and beyond,” Assabi explained.

^{Yaron Assabi, founder of MVNE and Digital Solutions Group. (Source: Digital Solutions Group)}

Assabi agreed with Mekala that there is a clear opportunity for MVNOs to fill service gaps, particularly in niche or underserved segments.

“Youth-focused MVNOs, rural and agricultural services, diaspora and remittance-linked offerings, and mobile-first fintech partnerships all have room to thrive,” Assabi said.

“Although the [Nigerian] market is competitive, with well-established MNOs benefiting from extensive infrastructure and brand recognition, their long-standing one-size-fits-all pricing model has created demand for MVNOs offering more flexible, cost-effective plans tailored to diverse consumer needs,” he added.

Assabi said Nigerians have a strong appetite for personalization and community-based offerings.

“Users want services that speak to their region, language, and lifestyle. This is where MVNOs can shine – by building highly relevant propositions that MNOs might overlook,” he continued.

Licensing regime and tier structure

Nigeria has opted to require licensing for MVNOs, something that is not the case in markets like South Africa.

Mekala said this is not entirely uncommon because when MVNOs first launched in Europe licenses were also required in some countries.

“While the five-tier structure is somewhat more elaborate than in many markets, it’s not without precedent and it reflects a sophisticated, forward-thinking regulatory approach. Countries like Mexico and India have adopted multi-tier licensing frameworks to allow for different levels of technical and commercial involvement,” Assabi added.

Mekala gave some insights into how the tiered licensing model works in Nigeria:

• Tier 1 – Virtual Operator (resellers using MNO SIM cards that are rebranded)
• Tier 2 – Simple Facilities Operator (resellers that can also provide VAS)
• Tier 3 – Core Facilities Operator (companies with complete core systems, business support systems [BSS], full control over SIM cards, and a global title and numbering plan)
• Tier 4 – Virtual Aggregator or Enabler (wholesale companies that can install a full core network and BSS and offers services to other MVNOs as an enabler or aggregator)
• Tier 5 – Unified Virtual Operator (the the most complex tier allowing licensees to offer a bespoke combination of Tier-1 to Tier-4 services, includes an infrastructure license)

The cost of an MVNO license in Nigeria ranges from 35 million naira (US$22,780) for Tier 1 to N500 million ($325,500) for Tier 5.

Assabi said that Nigeria’s tiered model gives players a clear entry path depending on their strategic goals, capital and technical expertise.

It also allows the NCC to manage the sector more efficiently by categorizing licensees based on complexity and responsibility.

“We believe this tiered system is actually a strength. It encourages a broad range of players from agile digital brands to larger telecom and fintech providers to participate in the market at a level that suits them, while ensuring regulatory oversight is maintained,” Assabi explained.

Mekala said that Tier 4 and 5 licenses also include rural licenses which allow these companies to go into unserved areas to build infrastructure under an agreement with one of the MNOs.

He said this is positive for Nigeria as it spreads investment and extends networks to previously unreached places.

Competition vs. collaboration

There has been some debate about why it has taken so long for MVNOs to launch in Nigeria. People often cite resistance from local MNOs.

“Historically, many MNOs were wary of MVNOs, viewing them as potential revenue threats. However, that perception is evolving. Today, MNOs face significant pressure to grow revenue while managing costs. MVNO partnerships offer a strategic way to maximize network utilization, reach new customer segments, and drive service innovation without stretching the MNO’s internal resources,” Assabi said.

He said more forward-looking MNOs are embracing MVNOs as valuable channel partners.

Mekala has also seen attitude changes from large operators in Nigeria, with the leading MNOs starting to engage with MVNO partners.

“There is always a resistance from the MNO side when there is a new MVNO or MVNE coming into the market, it has happened in every [market], but honestly, MVNOs actually add value to MNOs because they come out with new ideas. They are innovative and they try to find niches which MNOs are not even thinking about,” Mekala said.

Mekala and Assabi agreed that 46 licenses is a high number even for a large market like Nigeria, and they predict that not all of them will translate into operational MVNOs.

“It’s common in new sectors for a number of licensees to assess the opportunity, test the waters, and only a subset will eventually launch services,” Assabi said.

“I think in phase one, not all of them will launch. There are some waiting to see, some are still doing their business cases, and some are not even active yet,” Mekala said.

Assabi believes Nigeria’s population and mobile penetration rate creates space for multiple players, particularly if they are well-targeted and innovative.

“In mature MVNO markets globally, dozens of MVNOs can coexist as long as they are differentiated: offering unique pricing models, bundled services, loyalty programs, or partnerships with fintech and content providers,” he explained.

“Over time, we may see some consolidation or strategic alliances. What’s important is that the presence of many licensees indicates strong interest in the market, and that bodes well for future growth and innovation,” Assabi added.

Culled from Connecting Africa