1. Why do I need a communication license?

Telecoms service providers are prohibited from providing telecommunication services without a licence by virtue of Section 31 of the Nigerian Communications Act (2003) (the ‘Act”). The Act establishes the Nigerian Communications Commission ‘NCC’, which is responsible for the regulation of the communications sector in Nigeria.[1] It is a punishable offence for any person to operate a communications system or facility or provide communications services in Nigeria without the requisite licence. In addition, Regulation 5 of the Nigeria Telecommunication Act Licensing Regulation (2019) (‘the Regulations’) states that all communication services provided in Nigeria, must be provided pursuant to a license granted by the Commission.

2. Can an individual apply for a license from the NCC?

No, for an application for a license to be valid, the applicant must be a body corporate registered under the Companies and Allied Matters Act 2020.

3. What happens if a company operates without a license?

Providing telecommunication services without a valid license is an offence and the offender will be liable to pay an administrative fine of N5,000,000 for the contravention and N500,000 for each day the contravention persists after an order of cease and desist has been issued by the Commission.[2] It is also an offence to continue operating after the expiration of a license.

4. Can a foreign company apply for a telecommunication License in Nigeria?

No, all companies applying for a telecommunication license in Nigeria must be registered with the Corporate Affairs Commission ‘CAC’. As a foreign company, the company must also register with the Nigeria Investment Promotion Commission (NIPC) and obtain permits from the Nigeria Immigration Services (NIS) and other Regulatory Agencies before applying for a telecommunications license.

5. What types of licenses are offered by the NCC? 

The licenses offered by the NCC are divided into two categories: 

Individual license

An individual license means a license for a specified person to conduct a specified activity. An Individual License is a specific authorization in which the terms, conditions and obligations, scope and limitations are specific to the service being provided. The process of licensing can take the form of Auction, "First Come First Serve" or a standard administrative procedure. Individual license can be granted for the performance of the following services- Internet Services, Non-Commercial Closed User Group, Unified Access Service Licence, International Data Access, International Gateway and Interconnect Exchange, amongst others.

Class License

A class license is a license for any and all persons to conduct a specified activity. A Class License is a general authorization in which the terms and conditions/obligations are common to all license holders. Class Licences which can be obtained for the performance of the following services- Sales & Installation of Terminal Equipment, Repairs & Maintenance of Telecommunications Facilities, Cabling Services, Tele Center, Cyber Café and Public Payphone Services.

6. What are the requirements and procedure for obtaining an Individual License? [3]

The requirements for an Individual License are:

1. Obtain a bank draft of N1, 000 payable to Nigerian Communication Commission for the form. (Please note that the Commission’s name must be written in full on the draft).
2. Fill the application form and produce two copies, with the following documents attached:

• Certificate of Incorporation.
• Current Tax Clearance Certificate
• Certified true copy of Articles and Memorandum of Association.
• 3 passport photographs of authorized representative.
• Feasibility report of proposed service applied for.
• Internet Services
• Non-Commercial Closed User Group
• Sales & Installation
• Unified Access Service Licence
• International Data Access
• International Gateway
• Interconnect Exchange
•  The completed application should be submitted in triplicate copies with all necessary documents attached and bound.

  d. On submission, a non-refundable administrative charge, which is five percent (5%) of the relevant license fee would be paid.

  e. License offer is granted if all conditions/requirements are met.

  f. All payments are required to be in bank draft.

7. What are the requirements and procedure for obtaining a Class License?[4]

The requirement for Class license are listed below:

1. Obtain a bank draft of N1, 000 payable to Nigerian Communications Commission for the form. (The Commission’s name must be written in full on the draft).
2. Fill the application form and produce two additional copies with the following documents attached:

1. Certificate of Incorporation or registered business name
2. Tax Clearance Certificate
3. Certified true copy of Articles and Memorandum of Association
4. 2 passport photographs of authorized representative
5. Certificate of qualified technical staff. (if applicable)
6. Brief on the proposed service
7. Passport photographs of Directors of the Company/Sole Proprietorship

 3.  The completed application should be submitted in duplicate with all necessary documents attached and bound.

4.  License fee on submission of application is N10,000.

5.  All payments are required to be in a bank draft.

8. Can a company transfer its license?

Should a Licensee wish to transfer or assign a license validly issued to it, the licensee must apply to the Commission to obtain approval and pay the administrative fees as may be determined by the Commission.[5]

9. What is a Unified Access Service License? 

This is a type of an individual license issued by the Commission   under the powers granted to it by Section 32 of the Act . This license allows the licensee to provide a basket of services under a single license. For example, under a Unified Access License, the licensee is permitted to provide Mobile and Fixed telephony services, National Long Distance, Gateway services all under one license. The Licence can be for Regional or National Services.[6]

10. What is a Value Added Services License?

A Value-Added telecommunication license is a license to provide non‐core Network telecommunication services which are beyond standard voice calls. These services include Internet services, directory service, paging service, voice mail and prepaid calling card service, call center services, content services, vehicle tracking. The service provider does not own a network to provide the service and may ride on existing networks.

11. What are the Additional Requirements for Value Added Services (VAS)? 

Additional requirements for VAS (Content Services Using Short Code) are as follows:

1. Evidence of an Agreement or a Memorandum of Understanding (MOU) entered between the Company and the Mobile Network Operator(s) (MNO) for the provision of VAS – Content Services.
2. Alternatively, the Company should provide a copy of License duly issued to it by the CBN for Mobile Services or Lottery Commission for lottery services.                                                       

12. Who is a Mobile Virtual Network Operator (“MVNO”)?

 An MVNO is a telecommunication operator whose services and products are provided under its brand name whilst making use of the  network of a fully licensed MNO. The MVNO reaches a ‘Wholesale Agreement’ or ‘Revenue Sharing Agreement’ with the MNO through negotiations and delivers its services to its customers at a reduced price after bulk purchasing resources from the MNO. The difference between an MVNO and an MNO is the simple fact that an MVNO has no ownership whatsoever of spectrum elements, irrespective of its operational model.[7] An MVNO is regarded as a value-added telecommunication license which does not own the infrastructure required to provide mobile network services- to its customers.

13. What is the procedure/requirement for obtaining an MVNO license? 

These requirements serve as general guidelines to aid potential licensees to facilitate a smooth licensing application process. They include:

1. Licensee must be a corporate body registered under the laws in force in Nigeria with proof of same submitted to the Commission during application.
2. Licensees are to file with the Commission, the full contract agreement with at least a Host Network Operator or a National Carrier.
3. Licensee is obliged to show proof of financial capabilities to cover its CAPEX and OPEX for the implementation of its strategic operations.
4. Licensees must meet the technical requirements of the Commission for operating within the tier of choice.
5. Where applicable, Licensees should have secured reservation or assignment of resources required to operate specifically Numbering resources.
6. Licensees must be aware of the necessity to obtain other licences in provisioning its full services and outline them when submitting application.
7. Licensees shall provide necessary information to the Commission as specified under Schedule 1 of the Licensing Regulation document, 2019.
8. In line with Executive Order regarding contracts and services, Licensee should show prove of local content in its ownership and service delivery.[8]

The licensing procedure for an MVNO include:

1. The licensing process of Virtual Network Operators will conform with the established licensing processes and requirements set by the Nigerian Communications Commission for obtaining an Individual License.
2. The licensee must complete an initial Introduction form which furnishes the Commission with information needed to prepare its license upon agreement with the host MNO.
3. Along with the introduction form, the Licensee must submit a Performance Bank Guarantee, the value of which shall be the amount mentioned in the guarantee document, Financial Bank Guarantee, and a summary of capital structure proving its capacity to fund and maintain its operations through the tenure of the license.
4. Administrative award will be made upon completion of above requirements stipulated in (b) and (c).[9]

14. What is the validity of an MVNO license?

The license is valid for a period of 10 (ten) years, with an option to renew for another period of 10 years, provided that the requirements for renewal are met. The Commission also reserves the right to suspend or revoke a license after its issuance if the MVNO flouts any of its requirements or guidelines for its operations.

15. Can an MVNO license be renewed, revoked or suspended?  

MVNO licenses can be renewed upon request by an Operator not later than twelve (12) months before the expiration of a current license. Renewals of licenses are not automatic as the Commission reserves the right to review the performance of the Operator during the current license tenure and ascertain worthiness of Operator to continue delivering its services [10].

The license of the Operator can be revoked or suspended if it violates any provision of the Act or Regulation establishing it, violated the MVNO agreement between itself and the MNO or it operates beyond the scope of the tier it has paid the license fee for.

16. How long does it take to obtain a telecommunication license?

According to the provision of the Act, an applicant receives a response with respect to licence application within ninety (90) days of the submission of the application. However, for the Class Licence, once an application is complete, applicants are issued an offer letter immediately. For an Individual licence, depending on the service and completeness of required information, the Act provides for a period of between 4‐8 weeks.

Although Section 3 of the Business Facilitation Act (2023), provides that whenever an applicant makes an application to Ministries, Departments and Agencies (“MDAs”), and any such MDA refuses or neglects to communicate approval or rejection within the stipulated time, such application shall be deemed approved, we would not recommend proceeding on the basis of a deemed approval.

17. What is required to obtain an additional license or renew an existing license?[11]

Existing licensees wishing to apply for additional license(s) or renew their current licenses must be up to date on their existing licensing obligations. These obligations include but are not limited to the following:

1. Payment of Annual Operating Levy (“AOL”): the company is required to submit Audited Accounts (Management Accounts are to be submitted if Audited Accounts are not yet available) for assessment of the AOL payable to the Commission. Note that Non-Operational Licensees are also required to pay AOL
2. Submission of Year End Questionnaire/Information
3. Submission of Individual Consumer Code of Practice
4. Type approval of equipment in use on network
5. Payment of Spectrum and National Numbering Plan (NNP) fees (where applicable)
6. Obtaining prior approval from the Commission before change in shareholdings above 10%.
7. Notification on change of address, business name etc.
8. Obtaining approval before license transfer
9. Requirement to roll-out service / commence operation etc.
10. Submission of Annual Ownership Report not later than 31^st March every year (Corporate Affairs Documents).
11. Current Tax Clearance Certificate
12. Licensees seeking renewal must make their applications at least six (6) months before expiration.

18. What are Consumer Practice Codes?

By virtue of Section 106 (2) of the “Act”, the Commission may require licensees to prepare individual consumer code for their respective customers and such consumer code shall be subject to the prior approval of and ratification by the Commission. These codes are prepared by the service providers in order to ensure that the service providers meet such minimum standards of quality of service as the Commission may from time to time specify and publish, to ensure that they deal reasonably with consumers and adequately address consumer complaints.[12]

19. What is the Annual Operating Levy? 

These are the levies that is payable by eligible licensees pursuant to the Annual Operating Levy Regulations 2022.

A licensee that is a network operator shall pay to the Commission an annual operating levy, assessed at two and a half percent (2.5%) of the licensee's operating net revenue for the relevant period being its Gross Revenue less its Roaming cost, interconnect cost and value-added services payable to value-added, services providers for the period.[13]

For holders of internet service provider licence, only bandwidth cost is allowed to be deducted from gross revenue to arrive at the net revenue for the relevant period.

A licensee that is a non-network operator shall pay an annual operating levy to the Commission, assessed at one percent (1%) of the licensee's gross revenue for the period[14].

20. Who are Annual Operating Levies Applicable to? 

The annual operating levy are applicable to holders of individual licences issued by the Commission. The Commission may however expand the scope of application to include holders of class licences.

[1] Section 3, of the Act

[2] Regulation 13 of the Licensing Regulation

[3] https://ncc.gov.ng/licensing-regulatory/licensing/licensing-procedures

[4] https://ncc.gov.ng/licensing -regulatory/licensing/licensing-procedures#class-license

[5] Regulation 43 of the Regulation

[6] https://ncc.gov.ng/documents/434-licensing-framework-for-unified-access-service/file

[7] Section 4.1 of the License Framework for the Establishment of Mobile Virtual Network Operators of Nigeria (the Framework)

[8] Section 6.2.1 of the Framework

[9] Section 6.3 of the Framework

[10] Section 6.6 of the Framework

[11] https://ncc.gov.ng/licensing-regulatory/licensing/licensing-procedures#additional-licenses-renewals

[12] Section 104 Nigerian Communications Act 2023.

[13] Regulation 3(1) of the Annual Operating Levy Regulation

[14] Regulation 3(2) of the Annual Operating Levy Regulation