A Review Of The Business Rules For Mobile Virtual Network Operations And Its Impact On The Telecoms Industry In Nigeria

The Nigerian Communications Commission (NCC), in exercise of its functions under the Nigerian Communications Act 2003 (the Act), has published the Draft Business Rules for the Mobile Virtual Network Operator (MVNO) Licence¹ in the Nigerian Communications sector. These Business Rules clarify key aspects of MVNO operations, including onboarding, integration, interconnection, numbering, SIM management, revenue sharing, quality of service, consumer obligations, eSIM onboarding, and the respective rights and limitations of each licensee.

The recent draft Rules apply to all MVNO licensees, all Host Network Operators (HNOs) and all technical, operational and commercial arrangements for MVNO service delivery in Nigeria. Any relevant licensee is directed to submit a written proposal to the Commission requesting the review, amendment, or introduction of any provision of the Rules. Upon submission, the Commission will conduct an internal review of the Rules and either modify, accept, or reject the proposal. The objectives of the MVNO framework are to establish clear regulatory rights, obligations, and compliance standards for MVNOs and HNOs, promote fair access and competition, reduce operational delays, ensure service quality and consumer protection, and support innovation and sustainable growth in the mobile communications sector.

The document establishes general regulatory principles requiring parties to act in good faith and in compliance with applicable communications and consumer protection laws, prohibits discriminatory or obstructive practices by HNOs against MVNOs, and restricts MVNOs from operating beyond the scope of their licence. It further restricts MVNOs to operateonly within the scope of their licensed tier, requires lower-tier MVNOs to deliver services through HNOs or higher-tier MVNO platforms, defines the operational roles and infrastructure rights of each MVNO tier, and prohibits any MVNO from independently providing services outside a host network arrangement without regulatory approval. The framework establishes transparent and structured procedures for MVNO hosting, onboarding, and integration by requiring Hosts to provide standardised onboarding information, adhere to defined timelines and non-discriminatory practices, support technical and commercial integration, and remain subject to regulatory oversight to ensure fair access, timely implementation, and regulatory compliance.

The document requires all MVNO commercial agreements and material amendments to be documented and filed with the Commission, prohibits unilateral changes to agreed technical or rollout commitments without valid justification, provides for Commission intervention in negotiation disputes, and mandates that MVNOs conclude commercial and technical agreements with MVNOs within 120 days of a formal request. The provisions establish a regulated revenue-sharing framework for MVNOs and Hosts based on Commission-approved benchmark selling prices and permitted deductions, require pricing and settlement arrangements to be fair, transparent, auditable, and non-discriminatory, prescribe indicative revenue-sharing percentages by MVNO tier, and prohibit anti-competitive practices such as margin squeeze, predatory pricing, or unjustified deductions. It also requires interconnection and traffic routing arrangements to align with the MVNO’s licence tier and applicable interconnection regulations, mandate good-faith cooperation by Hosts and operators, and require lower-tier MVNO traffic to route through host networks. The new Rules also prohibit HNOs from unfairly delaying connectivity and prevent MVNOs from routing traffic in ways that circumvent regulatory, licensing, quality, numbering, or lawful interception obligations.

The Rules regulate numbering, SIM, eSIM, and remote subscriber onboarding by defining the numbering and operational rights of each MVNO tier, requiring lower-tier MVNOs to operate through Hosts, allocating SIM and eSIM responsibilities contractually, and mandating full compliance with KYC, subscriber registration, data protection, NIN-SIM linkage, and other regulatory requirements for customer onboarding and identity verification. The Rules require Hosts to provide MVNOs with sufficient technical visibility, capacity, resources, and implementation support for onboarding and service delivery. They prohibit unfair or discriminatory practices that delay or hinder MVNO integration, mandate transparent and objectively justifiable handling of technical constraints, and empower the Commission to intervene where a Host unreasonably obstructs MVNO operations. The provisions require MVNOs to comply with the Commission’s QoS and consumer protection rules, prohibit Hosts from unfairly degrading or prioritising traffic, and obligate MVNOs to maintain transparent tariffs, proper customer service systems, and compliant billing practices, while ensuring customer care responsibilities are managed in line with the Consumer Code of Practice and tariff simplification guidelines.

MVNOs and Hosts must submit regular and ad hoc compliance reports covering operational, technical, and service metrics, allow the Commission to inspect relevant systems and records for verification, and maintain adequate documentation to demonstrate ongoing compliance with regulatory rules and licence conditions. The Rules establish a structured dispute resolution process requiring escalation from technical to executive levels within defined timelines, allow for referral of unresolved issues to the Commission for intervention and for binding directions. The new Rules prohibit retaliatory actions that could harm subscribers, and set out enforcement powers and sanctions for breaches such as licensing violations, onboarding delays, discriminatory treatment, non-compliant onboarding practices, routing circumvention, and anti-competitive conduct.

        Key Impacts of the Draft MVNO Business Rules on Nigeria’s Telecommunications Industry

The Business Rules for Mobile Virtual Network Operations (MVNOs) in Nigeria introduce a comprehensive regulatory framework designed to structure the relationship between Mobile Virtual Network Operators (MVNOs) and Host Network Operators (HNOs). The framework clarifies operational responsibilities, standardises revenue-sharing mechanisms, sets strict onboarding timelines, and strengthens NCCs' supervisory powers. Collectively, these provisions are intended to promote transparency, efficiency, and fair competition within the telecommunications industry while ensuring compliance with licence conditions and consumer protection standards.

The following highlights outline the key impacts of the Business Rules on the Nigerian telecom industry:

1. Stronger market entry and increased competition: The rules introduce strict timelines for onboarding, integration, and agreement execution between MVNOs and Host Network Operators (HNOs). For example, commercial agreements must be concluded within 120 days, and technical onboarding steps contain defined deadlines. This reduces delays that previously slowed down MVNO rollout in Nigeria. As a result, new MVNOs can enter the market faster, increasing service availability and innovation.
2. Increased regulatory oversight: The Commission’s oversight of revenue-sharing benchmarks among parties, dispute resolution, enforcement of timelines for concluding technical agreements, systems inspection, and direct operational intervention creates a highly interventionist regulatory environment.
3. Higher compliance and operational burden: Both MVNOs and HNOs will face increased obligations around reporting, documentation, audit readiness, QoS compliance, consumer protection, KYC/NIN integration, and system transparency. This may increase operational costs, particularly for smaller MVNOs and less technologically mature operators.
4. Structured and Fair Revenue Sharing: The Rules introduce a tier-based revenue-sharing system ranging from 25% to 50% for MVNOs, depending on their operational capability. Revenue is calculated using a benchmark selling price minus only approved deductions. This ensures that revenue distribution is standardised, transparent, and linked to actual operational roles, reducing disputes between MVNOs and host operators.
5. Restriction of Unauthorised Deductions: Only specific, verifiable deductions are allowed when calculating shareable revenue, such as interconnect costs (voice/SMS) and bandwidth costs (data). Any other deductions must be explicitly approved by the NCC. This prevents operators from introducing hidden charges or accounting adjustments that could reduce MVNO earnings unfairly.
6. Mandatory and Timely Onboarding Obligations: HNOs are required to acknowledge requests within 10days, provide technical feedback within 20days, and follow structured processes with clear milestones. This eliminates indefinite delays and ensures accountability in how MVNOs are integrated into host networks.
7. Clear MVNO Tier Structure and Role Definition: The document establishes five MVNO tiers, each with defined rights and limitations ranging from basic service-based MVNOs to full enabling platforms. This reduces ambiguity in operations and ensures that each MVNO operates strictly within its licensed scope without overstepping regulatory boundaries.
8. Greater Transparency and Auditability: Operators are required to maintain detailed records such as billing data, traffic reports, settlement records, onboarding logs, and subscriber information. These records must be available for NCC inspection and verification, ensuring transparency and enabling effective regulatory .

Assessment of the New MVNO Rules in Addressing Low Market Performance and Service Rollout Challenges.

The new MVNO Business Rules appear to be a direct regulatory response to the slow rollout, limited market activity, and operational challenges experienced by licensed MVNOs in Nigeria. The Rules attempt to address many of the structural and commercial barriers that previously discouraged or delayed MVNO operations.

One major issue affecting MVNO performance was the dependence on Host Network Operators (HNOs), particularly in areas such as onboarding, integration, interconnection, numbering access, and technical support. Under the previous environment, some MVNOs reportedly faced prolonged negotiations, delayed technical integration, lack of transparency, and unequal commercial treatment. The new Rules address this concern by introducing strict timelines, mandatory onboarding obligations, escalation procedures, and regulatory oversight throughout the integration process.

For example, HNOs are now required to:

• acknowledge hosting requests within 10 days;
• provide responses within 20 days;
• conclude agreements within 120 days; and
• justify any refusal or delay to both the MVNO and the Commission.

The Rules also prohibit Hosts from using internal processes, technical restrictions, or capacity allocation practices to frustrate MVNO market entry. This significantly reduces the ability of dominant operators to delay competitors indirectly.

Another major concern was uncertainty around revenue-sharing arrangements and excessive deductions by Hosts. The new framework introduces benchmark selling prices, permitted deductions, and indicative revenue-sharing percentages based on MVNO tiers. By limiting deductions to verifiable costs and prohibiting anti-competitive pricing behaviour, the Rules improve commercial predictability and may increase investor confidence in the MVNO market.

Additionally, the Rules strengthen regulatory enforcement. The NCC now has broader authority to intervene in disputes, inspect systems, enforce onboarding timelines, direct technical adjustments, and impose sanctions for non-compliance.

In assessing the likelihood of correcting the current trend, the Rules have strong potential to improve MVNO rollout and participation in the market, particularly because they address many of the operational challenges that historically limited deployment. However, the success of the framework will largely depend on effective implementation and consistent enforcement by the NCC.

If the regulator actively monitors compliance and enforces the Rules where necessary, the framework could significantly accelerate MVNO operationalisation, strengthen competition, and expand consumer choice within the telecommunications sector. However, where enforcement is inconsistent or delayed, longstanding challenges, particularly those relating to Host cooperation, onboarding processes, and technical integration, may continue to persist despite the regulatory reforms.

Ultimately, the Rules represent a significant regulatory effort to establish a more structured, transparent, and commercially viable MVNO ecosystem in Nigeria, with a strong potential to reverse the current low-performance trend, provided they are effectively implemented and consistently enforced.

Footnote

1 NCC, ‘Public Inquiry on the Draft Business Rules for Mobile Virtual Network Operator (MVNO) Licences’ available at (https://ncc.gov.ng/media-center/public-notices) accessed on May, 25^th 2026.

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