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A new report by SBM Intelligence has sounded the alarm over the deteriorating state of Nigeria’s telecommunications sector. The report warns that unless the government takes decisive action, the industry could face collapse — jeopardizing Nigeria’s digital transformation ambitions.
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Titled “Signal Strength: The Past, Present, and Future of Nigerian Telecom,” the report underscores the need to prioritise foreign exchange allocations to telecom operators. Government also needs to implement robust enforcement of infrastructure protection. In addition, it must address the wide gulf between the government’s digital policies and real-time sector challenges.
Despite contributing 14.4% to Nigeria’s GDP in Q4 2024, the telecom sector is battling rising operational costs, chronic FX shortages, excessive taxation, and infrastructure vandalism. The SBM report directly questions the strategic leadership under Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, stating that while digital innovation initiatives like the 3 Million Technical Talent (3MTT) program are commendable, they do not address the pressing realities of telecom infrastructure and sustainability.
“A minister without a comprehensive understanding of core telco operations might find it difficult to translate broad digital goals into effective policies that genuinely support the underlying infrastructure,” the report noted.
Telecom Operators Under Economic Pressure
SBM cites MTN Nigeria CEO Karl Toriola, who emphasized that the telecom industry “cannot survive” without tariff hikes. MTN’s revenue reportedly grew 30% in 2024, but operational costs surged by 96%, mainly due to diesel price hikes (from ₦300 to ₦1,200/litre), FX devaluation, and the cost of importing telecom equipment — 70% of which is sourced internationally.
Telcos also face over 41 different taxes, and prohibitive Right-of-Way (RoW) charges that hinder infrastructure expansion, particularly for broadband deployment.
Disconnect in Policy Execution and Infrastructure Protection
The report criticizes the poor enforcement of the Critical National Information Infrastructure (CNII) Protection Policy, despite a presidential directive in August 2024 to classify telecom assets as CNII.
“Operators report ongoing attacks and vandalism due to a lack of clear enforcement directives and the failure to designate a specific security agency,” SBM stated.
This gap between policy formulation and execution continues to expose vital telecom infrastructure to risks, threatening network stability and national digital resilience.
Legacy and Regulatory Challenges
SBM also reviewed the tenure of former minister Prof Isa Ali Pantami, acknowledging policy wins like the National Digital Economy Policy and Strategy (NDEPS) and Nigeria’s 5G rollout, which generated over ₦1 trillion in revenue. However, controversial moves such as the NIN-SIM linkage and the 2021 Twitter ban led to a decline of 9 million internet subscribers and an economic loss of over $366.9 million.
Meanwhile, the ongoing review of the Nigerian Communications Act (NCA) 2003 by the House of Representatives is seen as a critical move to modernise outdated regulatory frameworks and reduce cost pressures on telcos.
Recommendations from SBM Intelligence
To ensure the survival and growth of the telecom sector, SBM calls for the following actions:
- Priority access to FX for telecoms to ease the cost of importing critical infrastructure
- Effective CNII protection enforcement, with a designated security agency
- Reform of multiple taxation and RoW charges to enable network expansion
- Greater public-private engagement through structured consultations and stakeholder dialogues
- Stronger regulatory independence and professionalism at the NCC under Prof. Aminu Maida
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Legislative reforms to provide telcos with a sustainable operating environment
The Way Forward
The report concludes with a stern warning: “Nigeria’s telecommunications future hinges on achieving a delicate balance between regulatory effectiveness, industry sustainability, and consumer affordability.”
Failing to act decisively, SBM Intelligence warns, could derail Nigeria’s ambition of becoming a leading digital economy in Africa, and further widen the digital divide in underserved regions.
