Active ISPs in Nigeria Drop to 242 in July, Says NCC

The number of active Internet Service Providers (ISPs) in Nigeria has decreased to 242 as of July, down from 252 in May this year, due to several operators failing to renew their licenses, according to data from the Nigerian Communication Commission (NCC).

In a report published this month, NCC revealed that despite issuing new ISP licenses to firms like Sulfman Consulting Ltd. and NGCOM Lastmile Solution Ltd. on July 1, 12 ISPs relinquished their licenses in June alone. The renewal fee for the five-year tenured permit is $324.

Former Executive Vice Chairman of NCC, Prof. Umar Danbatta, highlighted concerns over the growing number of inactive ISPs, citing challenges such as anti-competitive practices, inadequate spectrum, high bandwidth costs, expensive right of way, and governance issues within companies.

The dominance of mobile network operators (MNOs) like MTN, Airtel, Globacom, and 9Mobile, which provide both internet and voice services under their Unified Access Service Licence (UASL), has exacerbated competition for core ISPs, mostly indigenous companies focused solely on internet services.

The launch of 5G services by MNOs has further impacted ISPs, prompting some enterprise customers to switch to 5G routers, undermining the market position of traditional ISPs.

Despite challenges, data from NCC indicates that leading ISPs collectively served 262,206 active customers as of Q1 2024, compared to MNOs, which had 163.8 million active internet subscriptions during the same period.

Mr David Omoniyi, CEO of VDT Communications Limited, a prominent ISP, urged government intervention to support struggling ISPs, emphasizing their crucial role in achieving widespread broadband coverage as outlined in the National Broadband Plan 2020–2025.

Omoniyi emphasized the need for regulatory measures to protect smaller ISPs from anti-competitive practices by larger operators, ensuring a level playing field in the market.

In response, the NCC acknowledged the declining license renewal rate among ISPs and proposed a controlled increase in data prices to sustain them amid stiff market competition with MNOs.

As Nigeria prepares for its economic future, the fate of ISPs remains uncertain, contingent on regulatory support and industry adaptation to evolving market dynamics.