Nigeria’s ISPs Decrease To 242 As Operators Fail To Renew Licence

The number of active Internet Service Providers (ISPs) in Nigeria fell to 242 in July from 252 in May this year as several operators allowed their licenses to expire without renewal.
The Nigerian Communications Commission (NCC) updated its database in July, revealing the decline, despite the issuance of new licenses to two firms, Sulfman Consulting Ltd. and NGCOM Lastmile Solution Ltd., on July 1.
This reduction indicates that 12 ISPs chose not to renew their licenses in June alone. The five-year licenses, which cost N500,000 and are renewable, have faced declining renewal rates, prompting concerns from the NCC about the shrinking ISP market segment.
Former NCC executive vice chairman Prof. Umar Danbatta, recently highlighted that 568 licensed ISPs had become inactive as of March 2022, attributing this trend to challenges such as anti-competitive practices, inadequate spectrum allocation, high bandwidth costs, expensive Right of Way charges, and poor corporate governance practices among ISPs.
The competition between ISPs and major mobile operators, exacerbated by the introduction of 5G services by MTN and Airtel, has further strained smaller ISPs. Many enterprise customers have switched to 5G services, abandoning their previous ISP connections.
While mobile network operators like MTN, Airtel, Globacom, and 9mobile also offer internet services under their Unified Access Service Licenses (UASL), dedicated ISPs primarily focus on internet provision and are predominantly indigenous firms. Despite their smaller market share, ISPs collectively served 262,206 active customers as of Q1 2024, according to NCC data, whereas the major MNOs accounted for 163.8 million active internet subscriptions during the same period.
VDT Communications Limited CEO Mr. David Omoniyi emphasised the crucial role of ISPs in expanding broadband access across Nigeria. He urged government intervention to support struggling ISPs, many of which operate as Small and Medium Enterprises (SMEs) within the telecom market.
Omoniyi called for targeted regulatory interventions to level the playing field for ISPs against larger competitors. He stressed the importance of fair regulation to prevent monopolistic practices that could stifle competition and advocated for policies that sustainably support the growth of smaller ISPs.
Meanwhile, a study by the NCC’s Research and Development Department highlighted a declining trend in ISP license renewals amidst new entries into the market. The study recommended a regulated adjustment in data pricing to alleviate financial pressures on ISPs, citing current market conditions of artificially low data prices due to intense competition among service providers.