In February 2005,  a unified business licensing framework was  introduced in Nigeria which provided that :-

 -The market shall be opened up by adopting a unified licensing regime which shall allow existing fixed wireless and mobile licensees to provide both services subject to geographical/regional limitations contained in their licence.

 – For the post exclusivity period all wireless licences shall not be segmented in terms of mobile and fixed service categories. Once a spectrum is allocated, licensees shall be free to offer voice, data or multimedia services as they deem fit. 

-All active wireless licences issued prior to the expiration of the exclusivity period shall be amended accordingly.

These provisions led to a series of public consultations on the unified license option which resulted into a second phase of the consultation involving the appointment of a consultant to conduct a market analysis of the impact of the new license on the market in general and produce a framework for the license. 

 The final step in a series of lengthy consultation processes on this led to the creation of the framework and the introduction of Unified Access Service License. 

This article will thus be looking at the Unified Access Service business license in detail, with a focus on :- 

– Objectives of the licensing framework. 

– The scope of the Unified Access Service license. 

– Its licensing requirements. 

– Post-licensing Regulatory compliance requirements.

What are the business licenses combined into a Unified Access Service business license?

The Unified Service License covers the following services:- 

– Fixed Telephony whether wired or wireless. 

-Digital Mobile (GSM)Services.    

-International Gateway Services 

– National Long Distance (NLDO) Services. 

-Regional Long Distance Services.

In the Unified Access Service License, the following services will be allowed:-     

– FWA and PNL licensees (Fixed Telephony and LEO) will be allowed to provide mobile services subject to the frequency assignment and geographical limitations in the original license.  

– Digital Mobile licensees will be allowed to provide fixed and data services. 

-All Unified Licensees will be able to provide ISP, VAS and Payphone services. 

-International Gateway for own use and third party will be allowed. 

It should be noted that National Carrier Licenses and all other existing licenses will remain unchanged

Which organization is responsible for the grant of Unified Access Service licenses in Nigeria? 

The Nigerian Communications Commission (NCC) is statutorily empowered by the Nigerian Communications Act to receive, process and grant of reject applications for Unified Access Service business licenses in Nigeria.

What are the objectives of the Unified Access Licensing Regulations? 

The introduction of Unified Access Service licensing has the following objectives :-  

-Encouragement of the growth of new applications and services; 

– The simplification of existing licensing procedures to ease market entry and operations; 

– Achieving regulatory flexibility to address market and technological developments. 

-Efficient utilization of network resources, so that individual networks may be used to provide a broad range of ICT services. 

– Encouragement of a full range of operators, including large scale and micro entrepreneurs.   

What is the tenure of a Unified Access Service license? 

A Unified Access Service license has a validity tenure of 10 years renewable for the same term.

What are the qualification criteria for the grant of a Unified Access Service license?

To be eligible for unified license grants, existing licensees must meet the following criteria:- 

-An existing and operating network infrastructure. 

-A customer base of at least 10,000 connected subscribers or justifiable evidence of financial capability for substantial network rollout. 

-Must be up to date Payment of all fees and charges due to the Commission such as Annual Operating Levy (AOL), Spectrum and Numbering fees. 

-Must be up to date on submission of annual audited accounts. 

-Must be up to date on payment of company tax. 

-Must be up to date with equipment type approval. 

-Must be up to date in settlement of Interconnection obligations. 

-New applicants will be subject to the usual licensing application requirement.

What are the rollout obligations of Unified Access Service licenses? 

The NCC states that in line with technological advancements, many regulators are reviewing their universal access policies for the new converged environment. It is no longer fashionable to give rollout obligations to licensees. To spur the growth of rural service provision, regulators are rethinking their strategies and it has been found that reduced entry barriers, lower entry fees, infrastructure sharing and unhindered use of new wireless broadband technologies are more effective measures to promote cost-effective and rapid deployment of last-mile network technologies in rural and unserved areas.  

However, a purely market based approach to universal service has its limits. If stretched, especially remote and rural areas face the risk of remaining significantly underserved. Therefore, it is important to define national universal access targets and to develop mechanisms, such as establishing a universal access fund, designation of universal access operators or service areas subject to special treatment under a universal service approach.   

The Commission is developing universal access regulations in order to achieve service penetration that also includes marginalized groups and disadvantaged regions.  

The Commission will not impose separate rollout obligations on unified licensees, but rather deal with universal access issues in a separate universal access regulation, in which universal access targets and respective designation mechanisms are defined.

What are the operating license fees for Unified Access Service licenses in Nigeria?

A. The Commission proposes the following fee schedule for National and Regional Mobile service  

National Mobility   –   260 Million Naira.       

Regional Mobility     (Based on the tier structure in table below)     

TIER LICENCE FEE    

 Tier 1-33,000,000.00 Naira  

Tier 2-20,000,000.00 Naira  

Tier 3-16,000,000.00 Naira  

Tier 4-14,000,000.00 Naira  

Tier 5 – 9,000,000.00 Naira  

1. This fee schedule is proposed for any Fixed telephony operator wishing to migrate to a unified License; 

– Operating License Fees For Mobile Service – As Appropriate 

– Operating license fee for International Data Access (Gateway)   25,000,000.00 Naira.

– Operating License fee for National long Distance 20,000,000.00 Naira

– Operating license fee for regional long Distance (within a state)     1,000,000.00 Naira

It should be noted that any PTO wishing to migrate to Unified Licensing should surrender its existing licence and would be credited the unexpired portion of its licence fees and issued a unified license of 10 years tenure.

 Fees to be paid by existing mobile operators wishing to migrate to Unified Licence              

– Operating licence fee for Fixed Telephony–   44,600,000.00 Naira.  

– Operating Licence fee for International Gateway –   50,000,000.00 Naira.   

–Operating Licence fee for National Long Distance – 20,000,000.00 Naira   

Are there any limits to the number of Unified Access Service licenses that can be issued by the NCC? 

In the new framework, unified license operations would be open to competition subject however to the availability of frequency spectrum. The NCC may however, consider issuing a new license if it determines that the competitive environment is inadequate. 

The Nigerian government’s decision to deregulate the forex market is expected to increase the nation’s rate of economic hardship as the cost of goods and services will be determined by exchange rates – which have gone up since the decision was announced.

The economic impact is exacerbated by the government’s decision to remove subsidies: first fuel subsidy that has kept the cost of Premium Motor Spirit (PMS) affordable for the Nigerian people, especially, Small & Medium Enterprises (SMEs) that count on cheaper fuel to power their generators – as an alternative to an epileptic power supply. Then electricity subsidy, which was factored in the Electricity Bill signed by President Bola Tinubu earlier this month. The removal of electricity subsidy means electricity tariff will hence be based on the floated foreign exchange rates.

Currently, the Nigerian government pays N50 billion monthly to make up for the revenue shortfall in the power sector, thereby subsidizing electricity tariff for consumers. The removal of the subsidy is expected to increase the cost of electricity by as much as 40%, starting July, according to Guardian.

The Nigerian Electricity Regulatory Commission (NERC) 2022 Multi-Year Tariff Order (MYTO) has a fixed price based on exchange and inflation rates, which have been impacted by the floating of the naira.

The regulator’s Service Based Tariff (SBT) was established based on an exchange rate of N441 per dollar and an inflation rate of 16.97%. The current tariff rose from cheaper tariffs previously determined by lower inflation and exchange rates.

The 2015 N60 per kilowatt tariff was based on N198.97 per dollar exchange rate. The average rate was reviewed upward in 2020 based on N383.80 per dollar while in 2022, it was N441.78 per dollar. Rising inflation rates were also considered during the tariff revision periods. In 2015, the inflation benchmark used by NERC’s MYTO was 8.3%, in 2020 it was 12%, and 16.97% in 2022, which is currently being used.

With the subsequent increase in inflation rates, which currently sits at 22.41%, and the spike in the exchange rate – orchestrated by the deregulation of the FX market, which has seen the naira depreciate to N770 per dollar, a higher tariff is expected to hit electricity consumers soon.

The bitter expectation is compounded by uncertainties surrounding both the FX market and inflation rates. Experts said there is a likelihood that the exchange rate will jump much higher than it is unless there is enough dollar liquidity to take pressure off the naira. The removal of fuel subsidy is also expected to push inflation further up to 30% in the coming months.

This backdrop means there is going to be a significant increase in electricity tariff. The cost is estimated to rise as much as N90/kilowatt, amid depleting purchasing power of consumers. This means that Nigerians may end up paying up to N5,000 for just 50 units of electricity.

The government decided to remove fuel subsidies and float the naira without making provisions for palliatives that will cushion the effects. The resulting effect is that the Nigerian public will be forced to rely on the N30,000 monthly minimum wage to confront the resulting rise in the cost of living.
Experts said the situation will impact the economy negatively. This is because Nigeria is not generating enough electricity at the moment.

Presently, Nigeria’s electricity generation strength is said to be wobbling at around 3,057.7MW from 17 power plants, falling short of the 5,000 megawatts a year supply, included in the contract the distribution companies (DisCos) signed with NERC.

This backdrop means that while Nigerians pay as much as N90 per kilowatt, they will still have to buy fuel at about N500 –N557 per liter to power their generators due to poor electricity supply emanating from insufficient power generation.

Economists have called on the government to conduct an upward review of minimum wage as a way of boosting the spending power of the people in the wake of these policies.

“Minimum wage of N30,000 is nothing. It must go up to a level that allows consumption. Inflation will rise and fall irrespective of minimum wage but consumption is tied directly to wage earnings and/or credit. Less than 5% of Nigerians have access to a bank loan, so minimum wage must go up,” financial expert Kalu Aja wrote.