Nigeria’s telecommunications sector is set for closer regulatory scrutiny following a new directive requiring prior approval for ownership changes in licensed telecom companies.
The Nigerian Communications Commission (NCC) and the Corporate Affairs Commission (CAC) announced that any transfer of 10% or more of a telecom operator’s shareholding must receive a Letter of No Objection from the NCC before the transaction can be registered by the CAC. The requirement also applies to multiple smaller transactions that collectively exceed the 10% threshold.
The directive closes an existing regulatory gap that previously allowed some ownership changes to be registered without formal NCC clearance. Regulators said the measure is aimed at improving transparency, preventing anti-competitive ownership arrangements, and strengthening investor confidence in Nigeria’s telecom industry.
According to the NCC and CAC, the new framework will provide greater regulatory certainty for investors by ensuring that major ownership changes undergo proper oversight before completion.
However, industry observers have raised concerns about the absence of defined timelines for the approval process. The directive does not specify how long the NCC may take to issue a Letter of No Objection, creating uncertainty for investors involved in time-sensitive transactions such as mergers, acquisitions, and infrastructure deals.
The new rule is backed by provisions of the Nigerian Communications Act 2003, the Competition Practices Regulations 2007, and the Licensing Regulations 2019. It follows earlier NCC measures aimed at strengthening governance within the sector, including a cooling-off period for former senior officials and stricter accountability requirements for service quality.
A key test of the new regime may come with the proposed merger between Legend Internet and Spectranet, which will require NCC approval before it can be completed. The speed and consistency of the regulator’s handling of such transactions could determine whether the directive boosts investor confidence or creates additional hurdles for capital inflows.
