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By Chinenye Anuforo
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Nigeria’s telecommunications sector is facing a dire crisis, prompting an appeal from leading research firm, SBM Intelligence, for urgent and decisive government intervention.
In their latest report, “Signal Strength: The Past, Present, and Future of Nigerian Telecom,” SBM Intelligence demanded that the government prioritise telecom operators in foreign exchange allocations and enforce robust protection for critical infrastructure, warning that the industry’s survival and the nation’s digital future hangs on that strategy.
The call for immediate action comes as the sector, a major contributor of 14.4% to Nigeria’s GDP in Q4 2024, grapples with a storm of macroeconomic instability and operational hurdles. Operators have been forced to implement drastic tariff hikes, a move that, while deemed essential for their continued existence, places immense pressure on consumers and threatens to exacerbate the digital divide.
“The telecom industry ‘cannot survive’ without tariff increases,” revealed MTN CEO Karl Toriola, a sentiment reiterated in the SBM Intelligence report. He highlighted the staggering disparity between revenue and costs, with MTN’s top-line revenue growing approximately 30% in 2024 while costs soared by an alarming 96%. Toriola underscored that the tariff hike is “an ‘absolute necessity’ to maintain sustainability and prevent the collapse of companies and network connectivity systems.”
SBM Intelligence painted a picture of the forces pushing operators to this brink. The persistent scarcity and devaluation of the Naira have made importing essential equipment exorbitantly expensive, given that 70% of all telecom infrastructure is sourced internationally. Compounding this, the price of diesel, vital for powering Nigeria’s over 40,000 base stations amidst an unreliable national grid, has skyrocketed from N200-N300 per litre to a crippling N1,200 per litre. These economic pressures are further exacerbated by a complex system of multiple taxation with over 41 different taxes levied on operators and prohibitive Right-of-Way charges that hinder network expansion.
Despite these critical challenges, the sector’s strategic importance remains undiminished. It has been a bedrock of digital inclusion, fostering explosive growth in mobile subscriptions from under 300,000 in 2001 to over 160 million today. The industry is also a significant employer, creating an estimated 2.3 million direct and indirect jobs, and has been instrumental in expanding financial access through mobile money and USSD banking.
The report critically examines the current landscape, noting that while the Nigerian Communications Commission (NCC), under Aminu Maida, is undertaking internal reforms aimed at professionalism, significant internal resistance from NCC staff signals deeper institutional challenges. Similarly, despite Minister Dr. Bosun Tijani’s initiatives to boost innovation and expand broadband, SBM Intelligence showed a concerning “disconnect between policy formulation and effective execution.” Telecom operators continue to report rampant attacks and vandalism on critical national information infrastructure (CNII), attributing this to a lack of direction on the enforcement of the policy and the government’s failure to designate a specific security agency for the enforcement, despite presidential designation.
With this unstable environment, the ongoing legislative review of the Nigerian Communications Act (NCA) 2003 by the House of Representatives is deemed critical and timely.
“The amendment aims to modernize outdated provisions, address regulatory overlaps, and specifically alleviate cost pressures on telcos, with the ultimate goal of stabilizing tariffs and fostering a more sustainable digital future.”
SBM Intelligence concluded with a potent warning: Nigeria’s telecommunications future hinges on achieving a delicate and dynamic balance across three critical dimensions: regulatory effectiveness and independence, industry sustainability, and consumer affordability and digital inclusion. The report called on the government asserting that decisive action is not merely desirable, but indispensable, to prevent the collapse of a sector vital to Nigeria’s economic and social progress.
