The operational costs for Nigeria’s telecom sector increased dramatically from ₦3.16 trillion in 2023 to a startling ₦5.85 trillion in 2024.
- The operational costs for Nigeria’s telecom sector increased dramatically from ₦3.16 trillion in 2023 to a startling ₦5.85 trillion in...
- This 85% increase highlights the tremendous financial strain on the industry as it tries to reach broadband expansion targets.
- RoW fees, which are assessed for installing infrastructure or laying cables on public property, have become excessively high and inconsistent,...
- While this helped operators return to profitability after sustained losses, it had a downside.
Keep reading for the full breakdown on Alton — everything you need to know is covered below.
This 85% increase highlights the tremendous financial strain on the industry as it tries to reach broadband expansion targets. Nigeria’s goal to achieve 70% internet penetration by 2025, currently at 49.3%, is being jeopardised by the rapidly rising costs.
Rising costs and RoW fees
Telecom operators are experiencing the burden of inflation, foreign exchange volatility, and the increasing Right of Way (RoW) fees imposed by states, according to the Nigerian Communications Commission (NCC).
RoW fees, which are assessed for installing infrastructure or laying cables on public property, have become excessively high and inconsistent, impeding the nationwide rollout of networks.
Along with rising energy costs and currency depreciation affecting imported network equipment, these fees remain one of the most significant cost drivers, according to NCC statistics from 2024. As a result, capital expenditures for fibre expansion and 5G rollout have increased by 159% to ₦2.9 trillion.
Burden of high tariffs and subscriber loss
In response to rising expenses, the NCC authorised a 50% tariff hike on voice and data services from January 2025. While this helped operators return to profitability after sustained losses, it had a downside.
The increased tariffs contributed to a decline of over one million internet users in the first half of 2025 alone, as many Nigerians found the costs unaffordable amid broader economic hardships. Experts warn that the ₦5.85 trillion operating cost, combined with subscriber losses, poses a serious risk to Nigeria’s digital inclusion targets and to the economic progress of the tech sector.
“The industry is in a precarious position,” said Engr. Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON).
“While revenue is growing, our costs of OPEX and CAPEX are growing much faster. Operators are being forced to absorb costs related to energy, security, and multiple taxation, but the most frustrating of all are the arbitrary Right-of-Way charges that hinder the one thing we all need: broadband expansion.”
Telecom stakeholders are advocating for the government to implement a harmonised RoW policy to stabilise fees nationwide, as the likelihood of achieving the 70% broadband penetration target is diminishing. This policy enforcement is essential to Nigeria’s aspirations for its digital economy, as it alleviates cost pressures and facilitates the expansion of network coverage.