Airtel Nigeria, the country’s second-largest mobile network operator, has secured three telecom licences from the Nigerian Communications Commission (NCC) as it looks to unlock new revenue streams.

The licences include an Internet Service Provider (ISP) license, a National Long Distance license, and a Sales and Installation Major license. All three licences were awarded to Airtel Nigeria Telesonic Limited, a subsidiary of Airtel. 

While Airtel Nigeria could have operated in the ISP market using its Unified Access Service Licence (UASL), securing a standalone ISP license appears to be a strategic move to bolster its dwindling revenue in the Nigerian market–Airtel Nigeria reported a $13 million loss in H1 2024. 

The National Long Distance license, valid for 20 years, will allow Airtel Africa to provide telecommunication service over a long distance network – MTN already got into the business through its subsidiary Bayobab. The Sales and Installation license, valid for five years, permits the subsidiary to sell, install, and maintain telecommunications infrastructure.

Although Airtel Nigeria Telesonic Limited was incorporated on August 26, 2026, and launched on February 13, 2024, it has not officially begun operations. One person familiar with the matter said internal processes, including mapping the size of the investment and the logistics needed, must be completed before operations begin.

“Getting the licences is like a bank launching a fintech subsidiary,” said a telecom executive who asked not to be named. 

“By keeping it separate, Airtel Nigeria can act as a wholesale supplier to Telesonic, which holds the ISP license. This arrangement allows Airtel to report revenue as a wholesale supplier, while Telesonic reports the bandwidth costs, effectively reducing their tax liabilities by lowering gross profits.”

Airtel Nigeria did not respond to a request for comments. 

Airtel Nigeria is the latest entrant into the competitive ISP market. Competitors like MTN Nigeria and Globacom have made significant inroads since launching their ISPs in 2022 and 2024, respectively. The market is dominated by players like Spectranet, FiberOne, and Starlink. Airtel’s move could invigorate a market that has seen numerous exits due to the harsh operating environment driven by inflation and FX volatility.

However, this expansion may be constrained by its cost-reduction measures. The company is reportedly renegotiating contracts with tower companies to reduce its foreign exchange exposure, suggesting that it may not have substantial funds to invest in its new subsidiary.

“All mobile network operators are increasingly focusing on last-mile services because they offer higher profitability,” a CEO of an ISP company who asked to remain anonymous to speak freely told TechCabal. 

“Take voice services, for example—the interconnect rate is still ₦7 per minute, a rate set around 20 years ago. Consider what the dollar and diesel prices were back then, which are essential for powering their base stations. This is the rate MTN Nigeria pays them per minute for calls that MTN routes through their network.”

Airtel Nigeria’s move to enter the ISP market, though belated, could potentially shake up the sector which has shrunk over the past year with many operators shutting down due to high inflation and foreign exchange crisis in the country. However, to make a dent in the market it needs to grow the current size of the ISP market which stands at 262,207 active subscribers with an average revenue per user (ARPU) of ₦10,000 to ₦15,000.