Nigeria and the wider West African telecommunications market continue to witness strong subscriber growth, yet most operators are grappling with declining Average Revenue per User (ARPU), highlighting a growing disconnect between market size and profitability.
Despite a combined subscriber base exceeding 200 million, Nigerian telecom operators reported ARPU of just $2–$3 per month in 2024—far below the $35–$48 reported by major U.S. operators and the global average of $23.60 in other markets during the same period.
Data Usage Fuels Growth
Industry analysts attribute subscriber growth largely to increased data consumption, even as overall spending per user remains low. However, broader economic factors such as the naira’s devaluation and heightened price sensitivity have constrained earnings.
Experts also point to evolving consumer behavior as a critical factor shaping the market. “Consumers today are digital-first,” said an industry observer. “They no longer just purchase connectivity; they seek experiences powered by connectivity.” Mobile users are increasingly leveraging self-service applications and replacing physical interactions with digital experiences, with data acting as the backbone for these lifestyle services.
Social media and entertainment platforms have further elevated connectivity as a key access point to the world, intensifying competition among operators vying for consumer attention.
NCC Launches Sector-Wide Competition Study
In response to these shifts, the Nigerian Communications Commission (NCC) has commissioned a comprehensive study to assess competition in the telecom sector. At a stakeholders’ forum in Lagos, the NCC said it had engaged PricewaterhouseCoopers (PwC) Nigeria to conduct the diagnostic, data-driven assessment.
The study will examine market dynamics, structure, concentration, and operator behavior, while identifying barriers to entry, expansion, and consumer mobility. It will also evaluate the impact of significant market power on competition and provide recommendations to enhance innovation, service quality, and regulatory oversight.
Mrs. Omotayo Mohammed, Head of Competition and Tariff at the NCC, emphasized the importance of the study: “The sector has evolved significantly, with shifting revenue models, new investment patterns, and emerging market interactions. Rapid technological changes, rising investment costs, and competitive pressures make continuous validation of competition policy essential.”
She noted that the last industry-wide competition study was conducted in 2013, with more targeted assessments in 2018 and 2022. “The new study will provide a holistic reassessment, focusing on infrastructure, services, pricing, and emerging market segments,” Mohammed said.
Global Challenges Shape Local Realities
Akolawole Odunlami, Director of Strategy at PwC Network, highlighted that many challenges facing Nigerian telecom operators are mirrored globally. “Success is no longer defined solely by data offerings,” he said. “Operators worldwide are integrating lifestyle services into their platforms, offering access to health services, utilities, fintech, and more. Traditional voice and messaging are being disrupted by OTT services like WhatsApp and Teams, with data enabling the experience rather than just the call.”
This shift has affected traditional revenue models, with consumers increasingly valuing experience-driven communication over basic connectivity. Some global operators have embraced lifestyle services within their apps, allowing users to pay bills, access medical services, and engage with financial services—all powered by mobile data.
5G and AI: Opportunities and Constraints
Odunlami also pointed to 5G and emerging AI technologies as transformative trends. While 5G is projected to account for 64% of global connectivity by 2028, adoption in Nigeria and sub-Saharan Africa remains constrained at 14–17% due to infrastructure limitations and low investment in research and development.
Similarly, while AI has driven significant economic growth globally—accounting for 90% of first-half 2025 growth in the U.S. through hyperscale data center investments—Nigeria lags in AI-capable infrastructure. Experts advocate for a conducive regulatory environment and targeted government investment in infrastructure to accelerate adoption and support sector innovation.
Looking Ahead
As Nigeria’s telecom sector grapples with high subscriber numbers but low per-user revenue, the NCC’s competition study is expected to provide insights for policy reforms, investment strategies, and regulatory interventions aimed at fostering a level playing field, promoting innovation, and enhancing consumer experiences.