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•Share transfers above 10% now need NCC clearance
The Nigerian Communications Commission (NCC) and the Corporate Affairs Commission (CAC) have introduced stricter regulations for changes in the ownership structure of telecommunications companies, requiring prior regulatory approval for significant share transfers in the sector.
In a joint statement jointly signed by the Director of Public Affairs at the NCC, Nnena Ukoha, and the Head of Public Affairs at the CAC, Rasheed Mahe, at the weekend, both agencies announced that any proposed transfer of ownership or control involving 10 per cent or more of the total share capital of a licensed telecommunications company must receive a Letter of No Objection from the NCC before such changes can be registered with the CAC.
The directive, which takes immediate effect, is aimed at strengthening regulatory oversight, preserving fair competition and ensuring transparency in Nigeria’s communications industry.
According to the statement, the requirement is backed by the provisions of Section 90 of the Nigerian Communications Act (NCA) 2003, Regulation 28(2) of the Competition Practices Regulations 2007, and Regulation 42 of the Licensing Regulations 2019, which empower the NCC to review and monitor transactions involving its licensees.
Under the new arrangement, the CAC will only process and register changes in the shareholding structure of telecommunications companies where the transaction involves 10 per cent or more of the company’s shares if evidence of prior approval from the NCC is provided.
The agencies clarified that the rule also applies to multiple share transfers that may individually fall below the threshold but collectively exceed 10 per cent of a company’s total share capital.
Industry observers say the move is expected to strengthen scrutiny of mergers, acquisitions, investments and other ownership restructuring activities within the telecommunications sector, which remains one of the most strategic segments of the Nigerian economy.
The NCC and CAC explained that the policy is intended to prevent direct or indirect anti-competitive practices that could distort the market or undermine consumer interests. They noted that changes in ownership can have significant implications for competition, service delivery and the overall stability of the industry.
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“The requirement is designed to preserve a fair and competitive market structure within the communications sector by preventing direct or indirect anti-competitive practices, while strengthening regulatory oversight of significant changes in ownership and control,” the statement said.
The agencies added that the measure would improve transparency in corporate transactions, boost investor confidence and provide greater regulatory certainty for existing and prospective investors in the sector.
Analysts believe the directive aligns with global regulatory practices where communications regulators maintain oversight of substantial ownership changes in licensed operators due to the strategic nature of telecommunications infrastructure and services.
Nigeria’s telecommunications industry has witnessed increasing investor activity over the years, including equity investments, mergers and corporate restructuring exercises involving mobile network operators, internet service providers and other licensed communications companies.
The NCC and CAC stressed that the new requirement is not intended to discourage investment but to ensure that major ownership changes are subjected to appropriate regulatory review to safeguard competition and market integrity.
Both agencies reaffirmed their commitment to promoting a transparent, stable and competitive business environment while supporting the sustainable growth of the communications sector.
They pledged to continue working together to ensure compliance with regulatory requirements, promote fair market practices and provide the certainty needed to attract long-term investment into the industry.
