March 28, 2025/CSL Research
The Nigerian Senate has urged the Ministry of Communications, Innovation, and Digital Economy to work with telecommunications providers to review the recent surge in data costs. This follows plenary discussions where lawmakers expressed concerns over internet prices rising by up to 200%, adding to the financial strain on consumers amid the country’s high cost of living. The price hikes began last month after the Nigerian Communications Commission (NCC) approved a 50% tariff adjustment to help telecom operators offset the impact of Naira depreciation and inflationary pressures on the sector.
The lawmakers’ intervention now appears to be an attempt to ease tensions between advocacy groups, including the labour union, and the NCC, following the breakdown of negotiations to reduce the tariff increase to 35%. Notably, the labour union had threatened legal action against the telecom regulator and called for a boycott of telecom services. However, a large-scale boycott remains unlikely, given the country’s heavy reliance on internet services, particularly among the youth.
As negotiations continue, industry lobbyists are expected to emphasize that the 50% tariff increase is the first in over a decade and remains significantly lower than the 100% hike initially proposed by operators. The adjustment is considered crucial for the financial stability of publicly listed telecom companies and for attracting further investment in the sector, which has become a key driver of GDP growth. According to the National Bureau of Statistics (NBS), the telecom sector contributed approximately 26% of the 3.5% year-on-year GDP growth recorded in Q3 2024, second only to financial institutions, which accounted for around 37%.
Despite its economic significance, the sector is grappling with rising operational costs driven by high inflation, surging energy prices, and currency devaluation, all of which are straining profitability. This is particularly evident in MTN Nigeria, where Direct Network Operating Costs soared by 88.1% year-on-year to ₦1.23 trillion in FY 2024, up from ₦655.2 billion in FY 2023. Currency devaluation remains a major challenge, with foreign exchange (FX) losses significantly impacting publicly listed telecom operators. MTN Nigeria has been hit especially hard, recording ₦925.36 billion in FX losses in 2024.
Meanwhile, in a separate development in the telecom sector, MTN and Airtel, which hold approximately 52% and 34% of the market share, have announced a strategic partnership to share mobile network infrastructure nationwide. The agreement is expected to significantly reduce the costs of deploying and maintaining telecom infrastructure, allowing both companies to optimize resources. It is also likely to accelerate network expansion, particularly in underserved rural areas where high costs have historically slowed development.
For consumers, the partnership could lead to more affordable data and call rates as telecom operators benefit from cost savings and increased competition. Additionally, improved network quality and reduced congestion may enhance user experience, resulting in clearer calls and faster internet speeds. Overall, this collaboration is a transformative step for Nigeria’s telecom industry, driving efficiency, expanding connectivity, and supporting economic growth.
Click here to download full report: CSL Nigeria Daily – 28 March 2025 – Telecoms.pdf
