Privatisation: Telecoms’ $76bn Investment yet to Connect Millions
Nigeria’s telecommunications sector has attracted $75.6 billion in investment since the 2001 privatisation, yet millions of citizens lack access to connectivity.
Persistent challenges such as coverage gaps, poor service quality and rising costs continue to frustrate consumers, threatening the sector’s potential to drive the digital economy.
The liberalisation of Nigeria’s telecom sector in 2001 marked a turning point, transforming a landscape dominated by the state-owned NITEL into one of Africa’s most dynamic markets.
Prior to privatisation, Nigeria had fewer than 500,000 phone lines for a population exceeding 120 million. But the introduction of GSM licenses sparked explosive growth, with operators like MTN, Airtel, and Glo rapidly expanding connectivity.
“Back in 2001, we projected the leading operator might reach 10 milllon to 15 million subscribers. We have far exceeded that, but the unutilised 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 totalling approximately $75.6 billion, according to the Nigerian Communications Commission (NCC), have driven advancements from 2G to 5G networks, the rise of Internet Service Providers (ISPs), and the creation of tower and site build companies (TowerCOs). Companies like IHS Towers, which emerged from vendor-financed site-building initiatives, have become global players, illustrating Nigeria’s capacity to innovate in telecom infrastructure.
The landing of international submarine cables, pioneered by figures like Funke Opeke, laid the foundation for a digital economy, enabling connectivity that has reshaped how Nigerians communicate, work, and access services.
Growth, role as economic enabler
Nigeria’s telecom sector is among the largest in Africa and a significant global player, with over 169 million active phone lines and a contribution of 14.4 percent in to the gross domestic product (GDP) in 2024.
The sector’s evolution from voice and text to digital services mirrors global trends, with infrastructure and user interfaces now driving 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, told BusinessDay.
Banking, aviation, NGX, others
The telecom industry has been a critical enabler for other sectors.
Abubakar Suleiman, CEO of Sterling Bank, highlighted telecoms’ 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.”
Telecoms have enabled mobile wallets and mitigated cash shortages at ATMs, with operators like MTN and Airtel venturing into financial services. Suleiman emphasised collaboration over competition, with banks focusing on compliance, risk management, and deposit-taking to support telecom-driven innovations.
Alexander Nwuba, president of the Aircraft Owners and Pilots Association of Nigeria (AOPA-Nigeria), underscored telecoms’ importance in aviation, stating, “Modern aircraft transmit data via telecom networks for real-time maintenance.”
Telecom-enabled e-commerce drives demand for aviation logistics, addressing Nigeria’s loss of perishable farm produce by enabling same-day delivery for exports like pineapples to Europe.
As for the Nigeria stock market, the two leading telecom operators are among the four largest corporates on the exchange, making the sector critical to market investability. Telecoms are key to digital transformation, enabling retail participation and SME capital formation.
Obehi Aire-Okafor, managing director of the Edo State Tourism Agency, emphasised telecoms’ role in promoting tourism through digital platforms, which enhance access to information and drive economic inclusion in rural areas.
The sector’s impact extends to education and security. Digital infrastructure is essential for scaling education to meet the needs of Nigeria’s projected half-billion population by 2055, as physical classrooms cannot keep pace. Similarly, modern security systems relying on cameras and sensors depend on robust telecom networks, unlike Nigeria’s current reliance on manpower and weaponry.
Millions lack connectivity
Despite impressive investment and expansion across the telecoms sector, a significant number of Nigerians remain unconnected.
By the end of 2022, approximately 27 million Nigerians still lived in areas with no access to telecommunications services, a sharp but incomplete improvement from 37 million in 2013.
Government and industry reports suggest that these gaps are concentrated in 97 identified clusters, primarily located in rural and remote regions where the economics of infrastructure deployment are more challenging.
Compounding the coverage issue is a broader usage gap.
A recent GSMA report indicated that while Nigeria had significant mobile internet coverage, approximately 120 million Nigerians (about half the population) remained offline due to a usage gap caused by barriers such as the affordability of internet-enabled devices and data, a lack of digital skills, and issues with awareness.
The GSMA data from early 2025 revealed that 60 percent of Nigerians within 4G coverage did not use mobile internet; 18 percent lacked access to devices, while 42 percent owned phones but were not using them for internet access.
These figures underscore that connectivity challenges in Nigeria extend beyond mere infrastructure and into affordability, digital literacy, and device accessibility issues.
Nigeria’s telecom industry also faces significant hurdles that undermine service quality and consumer trust.
For instance, Nigerians report frequent call drops, rapid data depletion, and slow internet speeds.
Amaka Uche, a computer centre owner in Lagos, 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, lamented, “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.”
Fibre cuts, other challenges
Aminu Maida, executive vice chairman of the NCC, revealed that the industry faces over 1,100 daily fibre cuts, 545 access denials, and nearly 100 theft incidents involving generators and batteries annually. These disruptions directly impact connectivity and service quality.
On the flip side, BusinessDay findings show that operators face 54 different taxes across states, alongside levies on masts and right-of-way charges.
Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) noted, “The sector is a victim of its own success, targeted for taxation and arbitrary levies.”
Karl Toriola, CEO of MTN Nigeria, cited the naira’s depreciation from N450/$ to over N1,600/$, which quadrupled operating costs while tariffs remained frozen, leading to losses. “Without pricing flexibility, no industry can be healthy,” he said.
Internet shutdowns
As for internet shutdowns, Nigeria ranks among Africa’s worst for internet shutdowns, with 222 cumulative days of social media restrictions since 2015, including the 2021–2022 X (Twitter) ban. These disruptions, often tied to political unrest or elections, undermine digital rights and economic stability, according to Gbenga Sesan of Paradigm Initiative.
Sustainability and talent shortages are also major issues. The industry’s reliance on diesel generators contributes to a large carbon footprint, while a shortage of domestic software and telecom engineers threatens long-term growth. “Failing to build a local talent pipeline impoverishes our future,” the anonymous leader warned.
The way forward
Stakeholders have proposed a comprehensive strategy to sustain growth and address challenges.
Maida emphasised ongoing efforts to harmonise taxes and reduce fibre cuts through MoUs with the Ministry of Works and state governments, alongside a digital platform to notify operators of construction works.
He also highlighted a $1 billion in new equipment to upgrade base stations and expand fibre networks in the North Central region.
“Nigerians deserve better, and we are working to deliver that,” Maida assured, promising accountability for operators on service quality and transparent billing to address data depletion concerns.
Toriola, CEO of MTN Nigeria, stressed the need for regulatory certainty and pricing flexibility, citing advanced markets like the US and UK. He noted MTN’s N1 trillion 2025 capital expenditure for radio, fibre, and data centre upgrades, alongside infrastructure sharing with Airtel and 9mobile to reduce costs.
