The Nigerian Communications Commission (NCC) and the Corporate Affairs Commission (CAC) have jointly announced a new regulatory requirement mandating prior approval for substantial changes in the ownership structure of telecommunications companies operating in Nigeria. This directive, effective immediately, aims to enhance regulatory oversight, promote fair competition, and ensure the stability of the communications sector.
This significant policy shift is underpinned by Section 90 of the Nigerian Communications Act 2003 (NCA 2003), Regulation 28 (2) of the Competition Practices Regulations, 2007, and Regulation 42 of the Licensing Regulations, 2019. These provisions collectively empower the NCC to scrutinise transactions impacting its licensees and to foster a competitive market environment.
Under the new framework, any proposed transfer of ownership or control of shares in an NCC-licensed entity, amounting to 10% or more of the total share capital, will necessitate a Letter of No Objection from the NCC. This requirement extends to a series of share transfers that, in aggregate, exceed the 10% threshold. Without this prior consent, such ownership changes will not be registered by the CAC.
The CAC will now ensure that all applications for changes in shareholding structure exceeding 10% submitted by telecommunications companies are accompanied by documented evidence of the NCC’s explicit approval. This collaborative approach between the two regulatory bodies is designed to prevent anti-competitive practices, both direct and indirect, and to bolster transparency and investor confidence.
The stated objectives of this measure include preserving a fair and competitive market structure, strengthening regulatory oversight over significant ownership shifts, and promoting regulatory certainty. By safeguarding the long-term sustainability and stability of the communications industry, the NCC and CAC are reaffirming their commitment to fostering a transparent, stable, and competitive business environment in Nigeria. Both agencies pledge to continue their close collaboration to ensure regulatory certainty, uphold fair market practices, and support the orderly and sustainable development of Nigeria’s vital communications sector.
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