Nigeria’s telecommunications industry, a cornerstone of the nation’s digital economy, has attracted an impressive $75.6 billion in investment since its liberalization in 2001. Despite this influx, millions of Nigerians remain unconnected, grappling with persistent challenges such as coverage gaps, poor service quality, and escalating costs that threaten the sector’s transformative potential.
A Transformative Journey
The privatization of Nigeria’s telecom sector in 2001 marked a seismic shift, dismantling the monopoly of the state-owned Nigerian Telecommunications Limited (NITEL) and ushering in a competitive market driven by global giants like MTN, Airtel, and Glo. Before this reform, Nigeria had fewer than 500,000 phone lines for a population exceeding 120 million. The introduction of GSM licenses sparked exponential growth, with active phone lines now surpassing 169 million, according to the Nigerian Communications Commission (NCC).
“The projections in 2001 were modest—10 to 15 million subscribers for the leading operator. We’ve surpassed that, but the untapped potential of the NITEL license remains a missed opportunity,” an industry leader, speaking anonymously due to ongoing regulatory discussions said.
The sector’s evolution has been remarkable. Investments have fueled advancements from 2G to 5G networks, the rise of Internet Service Providers (ISPs), and the emergence of tower infrastructure companies like IHS Towers, now a global player. The arrival of international submarine cables, championed by innovators like Funke Opeke, has laid the groundwork for a digital economy, transforming communication, work, and access to services across Nigeria.
Economic Backbone and Sectoral Enabler
Contributing 14.4% to Nigeria’s GDP in 2024, the telecom sector is a powerhouse, ranking among Africa’s largest and a significant global player. Its shift from voice and text to digital services mirrors global trends, positioning it as a magnet for future investments over the next decade and beyond, according to tech analyst Jide Awe. “In 2010, connectivity drove telco revenues globally. Today, digital services are king, and Nigeria is catching up,” Awe noted.
The sector’s influence extends far beyond its own boundaries, enabling transformative growth in banking, aviation, e-commerce, and more. Abubakar Suleiman, CEO of Sterling Bank, credited telecoms for revolutionizing financial inclusion. “Without mobile phones and USSD integration, our platform enabling Nigerians to invest in capital markets in two minutes wouldn’t exist,” he said. Mobile wallets, powered by telecom operators like MTN and Airtel, have mitigated cash shortages and expanded financial access.
In aviation, Alexander Nwuba, president of the Aircraft Owners and Pilots Association of Nigeria, highlighted telecoms’ role in real-time aircraft maintenance data transmission and logistics for e-commerce-driven exports, such as same-day delivery of pineapples to Europe. The Nigerian Stock Exchange (NGX) also benefits, with telecom giants MTN and Airtel among its top corporates, bolstering market investability.
Obehi Aire-Okafor, managing director of the Edo State Tourism Agency, emphasized telecoms’ role in promoting tourism through digital platforms, enhancing economic inclusion in rural areas. The sector is also critical for education and security, supporting digital learning to meet the needs of Nigeria’s projected 500 million population by 2055 and enabling modern security systems reliant on cameras and sensors.
Persistent Challenges: Connectivity Gaps and Service Woes
Despite its achievements, the telecom sector struggles to deliver universal connectivity. By late 2022, 27 million Nigerians in 97 rural clusters lacked access to telecom services, down from 37 million in 2013. A GSMA report from early 2025 revealed a deeper issue: a usage gap affecting 120 million Nigerians, with 60% of those in 4G coverage areas not using mobile internet due to affordability, digital literacy, and device access barriers. Notably, 18% lack internet-enabled devices, while 42% own phones but don’t use them for internet access.
Service quality remains a sore point. Consumers like Amaka Uche, a Lagos computer centre owner, report frustration with frequent call drops and rapid data depletion. “We were promised better services with higher tariffs, but it’s worse—a mismatch between promises and reality,” she said. Jumoke Aliu, a student at Lagos State University, echoed this sentiment: “My 10GB data vanishes in three days without streaming. Either the networks are cheating us, or their systems are broken.”
Operational and Regulatory Hurdles
The industry faces significant operational challenges. NCC Executive Vice Chairman Aminu Maida reported over 1,100 daily fibre cuts, 545 access denials, and nearly 100 annual thefts of generators and batteries, all disrupting service quality. Operators also contend with 54 different taxes, levies on masts, and right-of-way charges, as noted by Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON). “The sector is a victim of its own success, targeted for excessive taxation,” Adebayo said.
Economic pressures exacerbate these issues. Karl Toriola, CEO of MTN Nigeria, highlighted the naira’s depreciation from N450/$ to over N1,600/$, which has quadrupled operating costs while tariffs remain stagnant, leading to financial losses. “Without pricing flexibility, no industry can thrive,” Toriola warned. 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 and talent shortages also loom large. The sector’s reliance on diesel generators contributes to a significant carbon footprint, while a lack of local software and telecom engineers threatens long-term growth. “Without a robust talent pipeline, we’re impoverishing our future,” the anonymous industry leader cautioned.
Charting the Path Forward
Stakeholders are rallying to address these challenges. Maida outlined NCC efforts to reduce fibre cuts through partnerships with the Ministry of Works and state governments, alongside a $1 billion investment in base station upgrades and fibre expansion in the North Central region. A digital platform to notify operators of construction works aims to minimize disruptions. “Nigerians deserve better, and we’re committed to delivering,” Maida said, promising stricter oversight of service quality and billing transparency.
Toriola emphasized the need for regulatory certainty and pricing flexibility, citing MTN’s N1 trillion 2025 capital expenditure plan for radio, fibre, and data centre upgrades. Infrastructure sharing with Airtel and 9mobile is also underway to cut costs. Industry leaders call for harmonized taxes, sustainable practices, and investments in digital literacy and local talent to ensure the sector’s continued growth.
As Nigeria’s telecom industry stands at a crossroads, its ability to bridge connectivity gaps and deliver reliable services will determine its role in powering the nation’s digital future. With strategic reforms and sustained investment, the sector could unlock unprecedented economic opportunities for millions of Nigerians.