Between April 2023 and January 2024, the Nigerian Communications Commission (NCC) issued licenses to 46 Mobile Virtual Network Operators (MVNOs) across the five tiers. Almost three years late
Between April 2023 and January 2024, the Nigerian Communications Commission (NCC) issued licenses to 46 Mobile Virtual Network Operators (MVNOs) across the five tiers. Almost three years later, only two have officially launched, with one recently declaring a soft launch.
Even the NCC didn’t foresee such a failure. When it pushed the idea in 2022, the ambition was to have smaller operators that support mobile network operators (MNOs) by connecting underserved communities nationwide.
In contrast, South Africa has 23 MVNOs, with the market projected to triple from 4.4 million active users in 2025 to 14.4 million in 2030. The market is so active that MTN South Africa linked the drop in its prepaid revenue during the 2025 financial year to competition from them.
As MVNOs struggle to launch in Nigeria, the target market continues to remain inside the claws of the coverage gap.
The harsh realities were so deep that Vitel Wireless, the first to launch in Nigeria, received a dedicated numbering series (0712) in January 2025. That’s two years after obtaining an operating license. It would later officially launch in August 2025 with the rollout of 50,000 SIM cards and eSIMs.
EmoSIM, the second MVNO to have launched, also did so in 2025. It was Nigeria’s first digital travel eSIM service that allows travellers to get voice, SMS, and data without a physical SIM.
Also, Lebara Nigeria, which holds a tier 5 MVNO license, has been dragging in the path for full launch. After laying the groundwork in June 2025 and missing the Q3 2025 target for launch, Lebara announced its soft launch in March 2026 and targets 1 million users in its first year.
With about 43 MVNOs yet to show signs of entering the market, bridging Nigeria’s connectivity gap hangs on a cold air from this side of business.
In an exclusive conversation with David Onyeke Ameh, an expert in Nigerian telecoms who has been with MTN Nigeria, Etisalat (now T2mobile) and now with Globacom, this article untangles five reasons MVNOs are struggling to launch in Nigeria.
It also provides opportunities for the NCC and the operators to explore to make market entry possible.
David Onyeke Ameh The bulk of the struggleExploring the cause of imbroglio will lead to a list of obstacles. These include wrong perception of the market, industry competition, and macroeconomic and FX pressures.
1. Wholesale access negotiation
A foundational obstacle preventing licensed MVNOs from going live is securing a two-end fair wholesale access agreement with their host (MNOs).
David noted that wholesale pricing dictates operational variables, such as tariff structures and financial modelling, capital raising and distribution strategies. And these operators cannot launch until there’s an agreement.
“The wholesale access agreement and more precisely, the fact that until very recently it was a purely bilateral negotiation with the one party that has every commercial reason to slow it down,” he added.
A leading issue is that host operators often delay negotiations by making high demands in the revenue-sharing format. And for now, the expert said MNOs view prospective MVNOs as direct competitors coming to take away their existing subscribers.
2. Misunderstanding the market conditions
When the 46 MVNOs paid a combined ₦8.6 billion to obtain licenses, they didn’t know that was a minimal fraction of the required capital for the telecom business. When the NCC opened applications, they all rushed to obtain licenses without understanding the telecom market conditions and the entire financial requirements.
David explained that running a viable MVNO requires building and maintaining full commercial capabilities, including charging and billing systems, SIM provisioning, NIN-linked registration, customer care, and interconnect settlements.
“A good number of licensees bought a licence, not a business. The word virtual did real damage; it suggested an API call and a brand name,” he said, adding that the capital limitations have made their licence irrelevant.
The misunderstanding of the telecom market led to MVNOs’ undercapitalisation. In fact, to be in position for launch, each is estimated to invest between ₦5 billion and ₦20 billion.
Telecom Tower3. Macroeconomic vulnerability and FX mismatch
The Nigerian telecoms industry already faces a currency exchange issue.
They purchase the bulk of their infrastructure in dollars but earn in naira, making average revenue per user (ARPU) lower. For new operators, obtaining infrastructure in dollars and earning in local currency leads to significant financial loss. MVNOs will not want this.
Also, David mentioned that foreign exchange (FX) volatility destroys their business models before considering a launch. Technical vendor fees, software licensing, and negotiations with their host network are priced in dollars.
With most MNOs aiming at bulk payment instead of pay-as-you-grow, prospective operators find it difficult to operate.
Also Read: eSIM: All you need to know and how to onboard in Nigeria.
4. Flawed customer targetingThe greatest undoing in MVNOs’ operational mapping is competing in the same market with the big guys (MTN, Airtel and Globacom). Also, attempting to launch with the normal prepaid voice and data offer places them as direct competitors with the leading MNOs.
According to David, attempting to win customers in a saturated market of roughly 188 million active lines where multi-SIM behaviour is already standard is the wrong way to approach business. And this is why MNOs will continue to place them on rigid terms: an attempt to make launching difficult.
Speaking about what he’ll do right if he were to own an MVNO, David said:
“What I would avoid entirely is general prepaid retail. With 188 million active lines in a country of roughly 230 million people, and multi-SIM behaviour everywhere, you are not competing for a new customer. You are competing for a slot in a wallet that already holds two or three SIMs,” he said.
An internet user5. Physical distribution costIn the telecom industry, the cost of building a nationwide retail and distribution channel from scratch requires years of field execution and capex. This is another capital-intensive conversation MVNOs cannot afford.
In addition, the telecom expert explained that MVNOs don’t have a fully digital onboarding framework for the mandatory linkage and verification of NIN-linked biometric registration for SIM activation; building one from scratch can be a lot. With this, they face high per-customer acquisition costs.
“The incumbent trade channel of trade partners, sub-dealers, retailers, the whole recharge value chain took two decades and enormous working capital to build. No MVNO is going to fund that, and none should try,” he added.
How to move forwardCompared to South Africa, the Nigerian market is a harsh environment for MVNOs; however, it doesn’t signify impossibility. A headline solution is to “cut your coat across to your size”.
For a successful launch, David noted that prospective MVNOs must abandon either price or subscriber competition with MNOs. In terms of capital base, they secure an agreement that is based on long-term and naira-based pricing structures.
The terms of agreement with host operators must be payment per subscriber instead of paying for expensive infrastructure. He mentioned that they need to target a different market that MNOs are yet to fully explore. An example is embedded IoT or diaspora eSIMs to ensure immediate and sustainable profitability.
NCC EVC/CEO, Dr Aminu MaidaWhereas, market regulations must favour MVNOs in terms of activities beyond their control. And this is where the NCC comes in.
Recognising the plight of virtual operators, the NCC revealed a Draft MVNO Business Rules in May 2026, a document that seeks to clear up operational bottlenecks between major host networks and virtual operators.
Beyond implementation, the NCC must ensure enforcement of the rules, such as the 120-day agreement window between the host and virtual operator and the automatic interim terms if negotiations stall. Another is enforcing the “use-it-or-lose-it” policy to purge inactive licenses from its list of MVNOs.
“It’s one recommendation that will be unpopular: use it or lose it,” David said, adding that “Licences that have not launched within a defined window should lapse and return to the pool. A register showing forty-six licensees and two operators misrepresents the market to investors and to policymakers alike.”
In the end, it’s about virtual operators understanding the ecosystem and knowing what works for them before approaching an MNO and considering a launch.
