One particular opinion defines Telecommunications as “Communication over a distance by cable, telegraph, telephone, or broadcasting”, while another defines ICT (Information & Communications Technology, a term that will be used interchangeably in this article with “Telecommunications” or ‘Telecomms’) as “An extensional term which places great emphasis on the functions of unified communications and the integration of telecommunications(Telephone lines & wireless signals) & computers as well as necessary enterprise software, middleware, storage & audio-visuals, that enable users to access, store, transmit, understand & manipulate information”.
Whichever angle you choose to view the topic from, the importance of telecommunications/ICT cannot be over-stated in every aspect of human existence from communications across continent-sized distances, the enhancement, support & storage of all financial transactions, and even the seeking of helpful information in various ways including but not limited to your ability to read this article right now as a good example.
This has also brought telecommunications as a foremost business sector with tons of active and potential investors seeking to partake in the Nigerian ICT services market which is believed to be by far one of the biggest telecoms markets in the world.
This article will thus be focused on outlining for potential investors, the business licenses available in the Nigerian Telecommunications sector as well as their permissible license activities and licensing requirements
Which government agency is in charge of regulating Telecommunications Business operations in Nigeria?
Telecommunications is regulated by the Nigerian Communications Commission (NCC) which is empowered by virtue of the Nigerian Communications Act to license, regulate and where applicable, penalize businesses in the telecomms sector.
Do business licenses in the Nigerian Telecommunications sector have categories of any sort and if they do, what are they?
Yes, they do. Business licenses in the Telecomms sector are categorized into :-
– Individual licenses :- These are license authorisations having terms, conditions,obligations & a scope limitation to the license service being provided. Licensing processes under this category can take the form of “Auctioning” processes, “First come, First served” processes, “Beauty Contest” processes or a standard administrative procedure.
– Class Licenses :- These are under another category of business licenses in which the terms and conditions/obligations are common to all license holders. This license requires only registration with the NCC for applicants to commence operation.
– Unified Licenses :- These fall under a separate business license category that allows the licensee to provide a bouquet of Telecoms services under a composite or unified license.
Who are the eligibility requirements needed to apply for a Telecoms business license in Nigeria?
To apply for a Telecomms business license you need :-
– To be a company registered in Nigeria with the Corporate Affairs Commission (CAC).
– An NCC license application form (2 copies).
– A Tax Clearance Certificate.
– A certified true copy of your applicant country’s Memorandum and Articles of Association (MEMART) .
– A copy of your proposed Telecommunications service feasibility report.
– 3 passport photos of your applicant company’s authorized representative.
– Certificates of qualified technical staff where applicable.
– Certified True Copies(CTCs) of your applicant company’s CAC Forms on the particulars of the directors of your company as well as their passport photos.
– Evidence of funding for the project.
– Payment of a non-refundable administrative charge which is 5% of the relevant license fee.
– For investors seeking Automated Vehicle Tracking Service (AVTS) applicants henceforth must obtain a security clearance from the State Security Service (SSS) for the proposed service before applying for the license, as a condition precedent for the grant of license by the NCC.
– For investors seeking VAS(Value Added Service) licenses which basically allow a business to provide content services using short code , the following must be presented :-
a) evidence of an agreement or Memorandum of Understanding (MOU) entered between the company and a VAS Aggregator;
b) alternatively, a copy of licenses duly issued by other regulatory agencies such as the Central Bank of Nigeria (CBN) for Mobile Money Operation Services (MMO) or the National Lottery Regulatory Commission (NLRC) for lottery/gaming/betting services.
Is it possible to seek additional licensing in the Telecoms sector while already operating under a previously issued license granted by the NCC? If yes, would any regulatory requirements also apply to the renewal of Telecoms business licenses?
Yes, it is. This is as long as the applicant is up to date on their existing licensing obligations which can include the payment of Annual Operating Licenses (AOL), obtaining prior approval from the NCC before change in the shareholdings of a licensee above 10% of its share capital and for renewal, submitting renewal applications 6 months before the expiration of the licenses.
What are the business licenses available in the Nigerian Telecoms sector and what are their validity periods and license fee requirements?
The following Telecomms business licenses are currently available in Nigeria :-
Class Licenses
- Licensing for the Sales & Installation of Terminal Equipment including mobile cellular phones and HF/VHF/UHF radio , fixed telephone sets, modems, cordless phones, Fax machines and PABV as well as switches not exceeding a 30-line capacity.
License Fee – 10,000.00 Naira (One-off).
- Licensing for the repair and maintenance of Telecoms facilities in the following categories–
a) . Category A – for an individual technician operating a small workshop.
b). Category B – for companies operating small & medium workshop.
c). Category C – for companies operating comprehensive workshops
Licensing Fee – 10,000.00 Naira (One-off)
- Public Payphone Licensing
License Fee – 10,000.00 Naira (One-off).
- Tele-Centre/Cyber-cafe Licensing
– This includes commercial telephone call centre only.
– In both urban and rural areas.
– This covers commercial telephone call services plus retail internet services.
– Category A – for individual technicians (cabling within premises only).
Licensing Fee – 10,000.00 Naira (One-off).
- Cabling Services Licensing.
– Category A – (Individual technicians cabling within premises only)
– Category B – for companies cabling within premises and/or estates
– Category C – for companies (including underground cabling)
Licensing Fee – 10,000.00 Naira (One-off).
Individual Telecoms Business Licenses
1. Licensing for the sales and installation of terminal equipment under which we have :-
– Sales & installation of satellite telecomms equipment.
License Validity Tenure :- 5 years
License fee – 500,000.00 Naira.
– Sales & installation of switching equipment for a capacity of more than 600 lines & a major network
License Validity Tenure :- 5 years
License Fee – 2 Million Naira
2. Value Added Service (VAS) Licensing under which we have :–
– Prepaid Calling Card (PPCC) Licensing
License Validity Tenure – 5 years
License fee – 1 Million Naira.
– Call Directory Services Licensing
License Validity Tenure – 5 years
License Fee – 500 Thousand Naira
– Special Numbering Services Licensing
License Validity Tenure – 5 years
License Fee – 3 Million Naira
– Call Centre Services Licensing
License Validity Tenure – 5 years
License Fee – 500 Thousand Naira
– Licensing for Content Services using short code
License Validity Tenure – 5 years
License Fee – 500 Thousand Naira
– VAS Aggregator Licensing
License Validity Tenure – 5 years
License Fee – 10 Million Naira.
3. Automated Vehicle Tracking Service (AVTS) Licensing
License Validity Tenure – 5 years
License Fee – 500 Thousand Naira.
4. Internet Service Provider (ISP) Licensing
License Validity Tenure – 5 years
License Fee – 500 Thousand Naira.
5. Paging Services Licensing
License Validity Tenure – 5 years
License fee – 500 Thousand Naira.
6. Licensing for Commercial Basic Radio Communications Network Services
License Validity Tenure – 5 years
License Fee – 250 Thousand Naira.
7. Trunk Radio Network Licensing
License Validity Tenure – 10 years
License Fee – 3 Million Naira.
8. Licensing for Collocation/Infrastructure Sharing Services
License Validity Tenure – 10 years
License Fee – 2 Million Naira.
9. Licensing for Internet Exchange Services
Licensing Validity Tenure – 10 years
License Fee – 1 Million Naira.
10. Licensing for Interconnect Exchange Services
License Validity Tenure – 10 years
License Fee – 1 Million Naira.
11. Licensing for Privately Network Links (PNL) Local Exchange Operator Services (Cable only) under which we have :-
–Urban PNL
Tier 1
License Tenure – 10 years
License Fee – 2 Million Naira.
Tier 2
License Tenure – 10 years
License Fee – 1.2 Million Naira
Tier 3
License Tenure – 10 years
License Fee – 1 Million Naira
Tier 4
License Tenure – 10 years
License Fee – 857 Thousand Naira
Tier 5
License Tenure – 10 years
License Fee – 571 Thousand Naira.
– Semi-Urban PNL
Tier 1
License Tenure – 10 years
License Fee – 1 Million Naira.
Tier 2
License Tenure – 10 years
License Fee – 600 Thousand Naira
Tier 3
License Tenure – 10 years
License Fee – 500 Thousand Naira
Tier 4
License Tenure – 10 years
License Fee – 428,500 Naira
Tier 5
License Tenure – 10 years
License Fee – 285,500 Naira
– Rural PNL
Tier 1
License Tenure – 10 years
License Fee – 300 Thousand Naira
Tier 2
License Tenure – 10 years
License Fee – 180 Thousand Naira
Tier 3
License Tenure – 10 years
License Fee – 150 Thousand Naira
Tier 4
License Tenure -10 years
License Fee – 128,500 Naira
Tier 5
License Tenure – 10 years
License Fee – 85,650 Naira
12. Licensing for Regional Private Network Links (PNL) Services under which we have:-
–National Licensing
Licensing Tenure – 10 years
License Fee – 44.6 Million Naira
– Tier 1
License Tenure – 10 years
License Fee – 2,800,000 Naira
– Tier 2
License Tenure – 10 years
License Fee – 1,680,000 Naira
– Tier 3
License Tenure – 10 years
License Fee – 1,400,000 Naira
– Tier 4
License Tenure – 10 years
License Fee –
– Tier 5
License Tenure – 10 years
License Fee -800 Thousand Naira.
- Licensing for Global Mobile Personal Communication Services via Satellite (GMPCS) under which we have :-
– Service Provider Licensing
License Tenure – 10 years
License Fee – 5 Million Naira
– Land Earth Station Operator
License Tenure – 10 years
License Fee – 10 Million Naira
– Group Licensing
License Tenure – 10 years
License Fee – Not yet specified
- Metropolitan Fibre Cable Network (MFCN) Licensing
License Tenure – 20 years
License Fee – 1 Million Naira plus 500 Thousand Naira for each location of service.
- Full Gateway Services (FGS) Licensing
License Tenure – 10 years
License Fee – 50 Million Naira
- National Long Distance Operator (NLDO) Licensing
License Tenure – 20 years
License Fee – 20 Million Naira
- Open Access Fibre Infrastructure Licensing
License Tenure – 20 years
License Fee – 2.5 Million Naira.
- Unified Access Service Licensing (Made up of Fixed Telephony National/Regional,DML, RLDO, NLDO, IDA, & FGS Licensing combined) under which we have the following categories-
– National Licensing
License Tenure – 20 years
– Tier 1 Licensing
License Tenure – 20 years
– Tier 2 Licensing
License Tenure – 20 years
– Tier 3 Licensing
License Tenure – 20 years
– Tier 4 Licensing
License Tenure – 20 years
– Tier 5 Licensing
License Tenure – 20 years
License Fee :- This fee would depend on the services within the Unified Access Service License Category that the applicant is interested in.
- Licensing for Non-Commercial/Closed User Radio Networks For Non-Telecoms Companies under which we have –
– 2-way Radio System Licensing
License Tenure – 5 years
License Fee – 125 Thousand Naira.
– Licensing for 3-30 Fixed and/or mobile (HF/VHF/UHF) Stations
License Tenure – 5 years
License Fee – 500 Thousand Naira
– Licensing for 31-50 Fixed and/or mobile (HF/VHF/UHF) Stations
License Tenure – 5 years
License Fee – 1.25 Million Naira.
– Licensing for more than 50 Fixed and/or Mobile stations including microwave & VSAT networks
License Tenure – 5 years
License Fee – 2.5 Million Naira
– Licensing for fixed and/or mobile stations including microwave & VSAT networks for embassies
License Tenure – 5 years
License Fee – Not applicable
- International Cable Infrastructure & Landing Station Licensing
License Tenure – 20 years
License Fee – $210,000.00
- Licensing for Mobile Number Portability
Licensing Tenure – 5 years
Licensing Fee – 1 Million Naira.
- Mobile Virtual Network Operator (MVNO) Licenses
– MVNO licenses are sort of a Telecomms equivalent for Digital Microfinance/Super-Agent Licenses in the Financial services sector and are basically regulatory authorizations for running Mobile Communication services via license leveraging agreements with established Mobile Network Operations .
The next article in the Telecoms series will be focused on how to set up MVNOs in Nigeria..
