Why 90% of Internet Service Providers in Nigeria shut down in five years

There have been collapse of over 90 per cent of Internet Service Providers (ISPs) within the last five year in Nigeria and the Nigerian Communications Commission (NCC) has revealed factors responsible for the collapse.

According to the Director of Licensing and Authorisation, Ms. Funlola Akiode, at a stakeholders’ forum on Internet Service Providers organised by the Commission, the decline in the number of ISPs in the country are as a result of many factors ranging from harsh economic environment and the bad competition from the big operators such as MTN, Globacom, Airtel and 9Mobile.

She stated that active ISPs in the country were not coming up for licence renewals because of their poor ability to compete with the ‘Big Four’ while revealing that the Commission had licensed a total number of 103 ISPs nationwide, in the past five years “but only 10 per cent have applied for renewal of the licence.”

She claimed, “that is one of the reasons why we are here, to find out if and why about 90 per cent of our ISPs are out of businesses, and why some ISPs have not rolled out services in accordance with the conditions of their licences.”

 “However, it may interest you to know that Nigeria, however, tends to be the lowest when measures in accordance with the penetration rate. For instance, the penetration of 48.4 million when compared with Nigeria’s population is just 0.3 per cent or 34 per cent, while our population is increasing in a geometric progression, the Internet usage and penetration rates are increasing in arithmetic progression.”

However, Sunday Dare, the Executive Commissioner, Stakeholders Management, NCC, pointed that the larger telecoms industry of which the ISPs are an integral part is beset with numerous challenges which include power, accessibility to foreign exchange, multiple taxation/regulation, infrastructure vandalism as well as high costs and long delays in obtaining right of ways permits.

“This not only degrade the quality of service provided by licensees, but also negatively affect the attainment of critical national objectives on the speedy roll-out of broadband networks to power socio-economic growth and the enhancement of the industry’s contribution to national gross domestic product (GDP).”

“We, however, strongly believe that ISPs have a critical role to play in the attainment of national broadband growth objectives and must therefore not be left to die out,” he said.