$75.6bn Invested, Yet Millions Still Offline in Nigeria’s Telecom Sector
Since the 2001 liberalisation, Nigeria’s telecommunications industry has drawn $75.6 billion in investments, yet millions of Nigerians remain disconnected, highlighting persistent gaps in coverage, service quality, and affordability.
The 2001 privatisation transformed Nigeria’s telecom landscape, shifting from the state-controlled NITEL to a vibrant market. Before this change, Nigeria had fewer than 500,000 phone lines for a population exceeding 120 million. The introduction of GSM licenses fueled rapid growth, with companies like MTN, Airtel, and Glo expanding access significantly.
“Back in 2001, we projected the leading operator might reach 10 million to 15 million subscribers. We have far exceeded that, but the unutilized NITEL license remains a missed opportunity,” an industry leader, who spoke on the condition of anonymity due to ongoing regulatory engagements, told BusinessDay.
Over the past 24 years, investments of approximately $75.6 billion, as reported by the Nigerian Communications Commission (NCC), have driven advancements from 2G to 5G networks, the growth of Internet Service Providers (ISPs), and the rise of tower infrastructure companies like IHS Towers, a global leader born from vendor-financed initiatives. The arrival of international submarine cables, led by pioneers like Funke Opeke, has laid the groundwork for Nigeria’s digital economy, transforming communication, work, and service access.
Nigeria’s telecom sector is a major player in Africa, with over 169 million active phone lines and a 14.4% contribution to GDP in 2024. The industry has evolved from voice and text services to digital platforms, aligning with global trends where digital services now drive revenue.
“In 2010, connectivity was the bulk of global telco revenues. A decade later, digital services dominate, and Nigeria is following suit. This shift positions the sector to attract significant investment over the next 10 years to 30 years,” Jide Awe, tech analyst, according to BusinessDay.
The telecom sector has been a catalyst for other industries. Abubakar Suleiman, CEO of Sterling Bank, emphasised its role in financial inclusion, stating, “Without mobile phones and USSD integration, our new platform allowing Nigerians to invest in capital markets in two minutes would not be possible.” Telecom innovations have enabled mobile wallets, eased cash shortages, and supported financial services ventures by operators like MTN and Airtel.
In aviation, Alexander Nwuba, president of the Aircraft Owners and Pilots Association of Nigeria (AOPA-Nigeria), noted, “Modern aircraft transmit data via telecom networks for real-time maintenance,” while telecom-driven e-commerce has boosted logistics for perishable exports.
In the Nigerian stock market, the two leading telecom operators rank among the top four corporates, underscoring the sector’s role in market investability and digital transformation. Obehi Aire-Okafor, managing director of the Edo State Tourism Agency, highlighted telecoms’ contribution to tourism through digital platforms, enhancing economic inclusion in rural areas.
The sector also supports education and security, enabling scalable digital learning for Nigeria’s growing population and modern security systems reliant on telecom infrastructure.
Despite these achievements, connectivity gaps persist. By late 2022, about 27 million Nigerians lacked access to telecom services, down from 37 million in 2013, with gaps concentrated in 97 rural clusters where infrastructure deployment is economically challenging.
A GSMA report from early 2025 highlighted a significant usage gap, with 120 million Nigerians—roughly half the population—offline due to barriers like device affordability, digital literacy, and awareness. While 60% of those in 4G coverage areas do not use mobile internet, 18% lack devices, and 42% own phones but do not access the internet.
Service quality issues, including call drops, rapid data depletion, and slow speeds, frustrate consumers. Amaka Uche, a Lagos computer centre owner, said, “We were told higher tariffs would improve services, but the experience is worse – a mismatch between promises and reality.” Jumoke Aliu, a student at Lagos State University, added, “I buy 10GB of data, and it is gone in three days without streaming. Either the networks are cheating us, or their systems are broken.”
Aminu Maida, NCC’s executive vice chairman, reported over 1,100 daily fibre cuts, 545 access denials, and nearly 100 annual thefts of equipment, all impacting service reliability. Operators also face 54 different taxes, most levies, and right-of-way charges, as noted by Gbenga Adebayo, chairman of ALTON, who said, “The sector is a victim of its own success, targeted for taxation and arbitrary levies.”
Karl Toriola, CEO of MTN Nigeria, highlighted the naira’s depreciation as a major cost driver, stating, “Without pricing flexibility, no industry can be healthy.” Nigeria’s 222 cumulative days of internet shutdowns since 2015, including the 2021–2022 X (Twitter) ban, further erode digital rights and economic stability, according to Gbenga Sesan of Paradigm Initiative.
Sustainability challenges, including reliance on diesel generators and a shortage of local telecom engineers, threaten long-term growth. “Failing to build a local talent pipeline impoverishes our future,” the anonymous leader warned.
Proposed solutions include harmonising taxes, reducing fibre cuts through collaboration with state governments, and investing $1 billion in network upgrades. Maida emphasised, “Nigerians deserve better, and we are working to deliver that,” promising improved service quality and billing transparency. Toriola noted MTN’s N1 trillion 2025 investment in infrastructure and cost-sharing with competitors to enhance efficiency.
