A mobile network operator in Nigeria has recently acquired three telecom licenses from the regulatory body in the country, aiming to diversify its revenue streams.
The licenses obtained include an Internet Service Provider license, a National Long Distance license, and a Sales and Installation Major license, all awarded to a subsidiary of the operator. This strategic move is seen as a way to enhance revenue, especially considering recent losses reported by the company.
The National Long Distance license, valid for two decades, enables the operator to offer telecommunication services over long distances. The Sales and Installation license, valid for five years, allows the subsidiary to sell, install, and maintain telecom infrastructure.
Although the subsidiary was established in 2022 and launched in 2024, operational activities have not yet commenced. Internal processes and logistics planning are cited as reasons for the delay in starting operations.
By separating the subsidiary with the ISP license, the parent company can benefit from reporting revenue as a wholesale supplier, potentially reducing tax liabilities. However, the operator has not provided any official comments on the matter.
This move by the operator comes at a time when the ISP market in Nigeria is becoming increasingly competitive, with other major players already making significant strides. Despite potential challenges, the entry of the operator could inject new life into the market, which has experienced downturns due to economic factors.
Concerns about the operator’s ability to expand this new venture have been raised, considering reported cost-cutting measures in other areas of the business. Renegotiating contracts and reducing foreign exchange exposure may limit the investment capacity in the new subsidiary.
Industry experts believe that focusing on last-mile services could lead to higher profitability for the operator. The move to enter the ISP market, though delayed, has the potential to reshape the sector, which has faced challenges in recent times.
Despite the constraints, the operator’s entry into the ISP market could bring new opportunities and competition to a sector that has seen a decline in recent years.