INTRODUCTION

Mobile Virtual Network Operators’ agreements with network operators can be traced back to the 1990s when the European Telecommunications market discovered new Regulatory Frameworks, improved and better network technology, and market liberalization.[1] In 2017, the Nigerian Communications Commission (NCC), after conducting research into other jurisdictions and reviewing the past and present surveys of the Nigerian market, along with the current regulatory documents covering Communications, published a request for the Development of a Licensing Framework for the establishment of Mobile Virtual Network Operators in Nigeria, which can be accessed HERE. This was in line with the Nigerian Communications Act, 2003.

MOBILE VIRTUAL NETWORK OPERATORS

A Mobile Virtual Network Operator (MVNO) is a Wireless Telecommunications Product and Service Operator that does not own its Wireless Network Infrastructure but operates on top of the capacity of a fully Licensed Telecommunications Service Provider or Mobile Network Operator.[2] The MVNO enters into a Wholesale Agreement or Revenue Sharing Agreement with either a Telecommunications Company (Telco) or a Mobile Network Operator (MNO) and delivers its services after bulk purchasing resources from Telco or MNO.[3] The MVNO has no ownership whatsoever of spectrum elements, irrespective of its operational model, also an MVNO may use its own customer service, billing support systems, sales personnel, and marketers.

MOBILE VIRTUAL NETWORK OPERATORS’ SERVICE IN NIGERIA

Within the Nigerian market, the MVNO is represented as subsystems that indicate the level of control an entity possesses within the Mobile Service Delivery Value Chain.[4]

Services Virtual Operator– A MVNO within this Subsystem leverages on its ability to offer services to its customers without owning any Switching or Intelligent Network Infrastructure. The responsibilities lie with the host Licensee to provide wholesale capacity to the MVNO for the delivery of its Products and Services. The pricing Infrastructure of the MVNO is strongly tied to that of its host Service provider. This Licence, therefore, grants the Operator freedom to operate in any of these areas such as Owning Brands, Owning sales and Distribution channels, Device and Phone Sales Management. Limited Tariff control, Customer Relation Platform, owning content/applications.

Simple Facilities Virtual Operator- A MVNO within this subsystem assumes more control of the value chain which allows it to significantly differentiate itself from its host. Even though it does not have Core Switching and Interconnect capabilities, it can set up its own Intelligent Network (IN) to provide its own IN services to the customer. The MNVO’s capacity to control its own tariff structure and packages to a high degree allows it to generate its own revenue through traffic from its own customers but still relies on a shared revenue structure with the host for inbound calls.

Core Facilities Virtual Operator- A MVNO within this subsystem relies on its technical and commercial prowess to launch and operate a full core Network with Switching and Interconnect capabilities. It engages in Interconnect agreements with other Network providers, Revenue generation stems from both outbound and inbound calls which gives it full control over its tariff structure. The MVNO here relies totally on its host to provide Radio Access capacity at wholesale to deliver its Products and Services to its Customers.

Virtual Aggregator/Enabler- A MVNO within this subsystem is responsible for aggregating and/or enabling Virtual Operations (VO) services within the market. It relies on a model in which it stands as a middleman between the MNO and multiple VOs. The aggregator is responsible for purchasing bulk capacity from a Licensed Network Operator, and reselling it to multiple VOs, therefore streamlining the process of negotiating capacity agreements with the said Network Operators. In pursuant of the objective to improve National Coverage, these Operators are permitted to directly engage customers within an underserved and unserved region through a ‘Shared Rural Coverage Agreement’ with a Licensed Spectrum owner.  

Unified Virtual Operator- A MVNO within this subsystem can decide the level of service it desires to offer from the listed subsystems, giving it the freedom of choice to deploy its services the way it deems fit if it still has a valid Licence.

OBLIGATIONS FOR OBTAINING THE LICENCE

The intended Licensee must be a corporate body registered under the Laws in force in Nigeria with the proof submitted to the Commission during the application, also filing with the Commission the full contract agreement with at least a Host Network Operator of a National Carrier.[5] The Licensee is obliged to show proof of financial capabilities to cover its CAPEX and OPEX for the implementation of its strategic operations, and they must meet the technical requirements of the Commission for operating within the tier (subsystem) of their choice. The Licensees must be aware of the necessity to obtain other Licenses in provisioning its full services and outline them when submitting the application. In addition, the Licensee must show proof of local content in its ownership and service delivery, also securing reservation or assignment of resources to operate specifically Numbering resources.

Furthermore, the Licensees shall provide necessary information to the Commission as specified under Schedule 1 of the Licensing Regulation Document, 2019.

THE LICENCING PROCESS

The Licensing process of MVNO will conform with the established Licensing process and requirements set by the Nigerian Communications Commission for obtaining an Individual Licence. The Licensee must complete an initial introduction form which furnishes the Commission with information needed to prepare its Licence upon agreement with the host MNO, and along with the introduction form, the Licensee must submit a PBG (Performance Bank Guarantee), FBG (Financial Bank Guarantee) and a summary of capital structure, proving its capacity to fund and maintain its operation through the tenure of the Licence. In furtherance, an administrative award will be made upon completion of the above requirements.

In view of the given Licence, the Licence will be valid for a period of Ten (10) years with an option to renew the license for the same term,[6] and the renewal shall be on request by the Licensee not later than Twelve (12) months before the current license tenure ends.

In addition, the renewal obligations such as: (i) the Licence renewal fees and other financial obligations (ii) Valid HNO-MVNO agreement filed (iii) other criteria to enable the renewal of Licence, should be met no later than Six (6) months before the expiration of the current licence tenure.[7] However, the Commission reserves the right to review the performance of the Licence during the current licence tenure to ascertain the worthiness of the Licensee to continue delivering its services.

SUSPENSION OR REVOCATION OF LICENCE

Where the Licensee violates the MVNO agreement between itself and the MNO, the licence can be either suspended or revoked. The licence can also be revoked if the licensee operates beyond the scope of the tier (subsystem) it indicated and paid the licence fees for.[8] Its revocation or suspension is subject to the same conditions set within condition 21 of the Unified Access Service Licence framework.

LICENCING OBLIGATIONS

A licensee must have a completed Commercial Wholesale Agreement with a Host Network Operator, and this agreement must be filed with the Commission prior to the application for an MVNO Licence. A duration of One Hundred and Twenty (120) days from the beginning of negotiations is permitted for the completion and conclusion of the commercial agreement, upon which the Commission reserves the right to mediate in line with the current provisions in the regulatory statutes. The document itself must detail technical parameters, Operations, Financial obligations, Legal understandings, SLAs, and other stipulations both partners deem fit[9].

The Licensee must comply with the Competitive Practices regulation issued by the Commission in delivering its services, it must ensure that it reports all suspected anti-competitive behaviors from Network Operators (Host or Visitor) and other MVNOs as soon as observed,[10] behaviors such as attempts to unfairly strain network capacity offered to MVNO, predatory wholesale pricing, discriminatory intent in providing network capacity, entering into exclusive agreements that prevent competitors from having access to capacity, misleading potential entrants on the availability of capacity, placing a condition within agreements that could lead to a disadvantaged party.

It is worthy to note that priority would be given to Licensee that target markets that fall within the unserved and underserved regions (Unserved and underserved areas are regions in the country in which network does not exist or has incredibly low coverage, respectively)[11] therefore the Commission seeks to provide subsidized mandates to operate within this region to encourage MVNOs to create business cases for these regions.

LICENCE COMPLIANCE

It is to this end that the Licensee shall ensure that it complies with the Consumer Code of Practice approved by the Commission, for the Licensee shall incur sanctions stipulated by the Commission if it operates beyond the scope of the MVNO tier (subsystem) for which it is licensed to operate, the Licensee shall be bound by all information provided and its commitments made when acquiring its licence, agreeing with a Host MNO and other agreements required to obtain legibility to deliver mobile telecommunications services within the regulatory regime, also complying with other regulatory authorities within the country such as the CBN, CAC, etc. bearing in mind that it is subject to the Laws of the Federal Republic of Nigeria.[12]

CONCLUSION

In conclusion, after the Licence has been granted, the Licensee will be limited to only the services proposed within the scope of the Licence document,[13] A licensee operating under this licence is unequivocally inhibited from controlling or operating spectrum resources outside of an underserved and unserved region,[14] neither is the Licensee exempted from applying for any other licence required for providing services beyond the scope of its obtained licence.[15]

FOOTNOTES:

[1] https://en.wikipedia.org/wiki/Mobile_virtual_network_operator last accessed 14th July 2022

[2] Guideline 4 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[3] https://www.yozzo.com/mvno-academy/mvno-definition/ last assessed 14th July 2022

[4] Guideline 4.2 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[5] Guideline 6.2.1 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[6] Guideline 6.4 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[7] Guideline 6.5 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[8] Guideline 6.6 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[9] Guideline 7.1 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[10] Guideline 7.2 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[11] Guideline 7.11 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[12] Guideline 7.10 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[13] Guideline 8.1 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[14] Guideline 8.2 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria

[15] Guideline 8.3 of the Licence Framework for the establishment of Mobile Virtual Network Operators in Nigeria


0 Comments

Leave a Reply

Avatar placeholder

Your email address will not be published.

error: Content is protected !!