The Nigerian telecommunications industry faced significant financial headwinds in 2024, with total operating costs (OPEX) soaring to a record N5.85 trillion in the year.
This represents an 85% increase compared with N3.16 trillion recorded in 2023, according to the latest industry data released by the Nigerian Communications Commission (NCC).
The surge, NCC said, was primarily attributed to high Right of Way (RoW) fees, coupled with persistent inflation, foreign exchange pressures, and rising energy costs that have strained operators’ balance sheets.
“Most Licensees complained of high Right of Way (ROW) fees, harsh micro economic operating employment and rising Inflation. However, the NCC has been able to secure zero Right of Way (ROW) fees in some States in Year 2024,” the Commission stated in the report.
The RoW debacle
Right-of-Way (RoW) fees, which are charges paid by telecom operators to deploy fiber-optic cables across roads and public spaces, have long been a source of contention in Nigeria’s digital infrastructure ecosystem.
Despite the NCC’s ongoing engagement with state governments to harmonize or eliminate these fees, operators continue to face significant disparities across states, with some charging as high as N9,000 per linear meter, far above the federal guideline rate of N145 per meter set in 2020.
- According to a recent list shared by the operators, Ogun State charges the highest rate at N9,477 per linear meter.
- Other states with high fees include Lagos – N6,264; Oyo, N5,303; Cross River – N4,737; Rivers – N4,047; Edo- N3,491; and Ondo – N3,075.
- Meanwhile, the Executive Vice Chairman of the NCC, Dr. Aminu Maida, last month disclosed that five more states have decided to waive the RoW charges.
- According to him, the states include Adamawa, Bauchi, Enugu, Benue, and Zamfara. This builds on the earlier decision by six states: Anambra, Katsina, Kebbi, Nasarawa, Osun, and Plateau, to eliminate RoW fees, bringing the total to 11 states offering zero-cost RoW to accelerate broadband infrastructure deployment.
Nigeria’s broadband target stall
While the operators are spending more on operations, the impact of several states still charging high fees for infrastructure rollout is also being felt on Nigeria’s plan to achieve 70% broadband penetration by the end of this year, which has now become a mission impossible.
As of September 2025, NCC’s data shows that broadband penetration in the country stood at 49.3%, an indication that Nigeria will not meet its target as set in the National Broadband Plan (NBP 2020-2025).
“One of the most significant barriers to broadband deployment in Nigeria has been the high RoW fees charged by state governments, despite a resolution by the Nigerian Governors Forum fixing the rate at N145 per linear metre,” the NCC boss, Maida, stated at a recent meeting.
The 2024 data reflects how these elevated fees have amplified the cost of network expansion. Many operators reported delays or scaled-down broadband deployment plans as RoW negotiations with multiple state agencies dragged on.
Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo noted that the implementation of the broadband Plan has not been able to progress as it should because several challenges identified in the Plan have not been addressed.
- He cited the issues of multiple taxation and high costs of the right-of-way as impediments to the deployment of infrastructure by the telecom operators.
- Adebayo added that some states, despite officially waiving right-of-way fees, impose hidden costs such as education taxes and highway levies, which discourage investment.
- While the Plan envisaged that Nigeria would need between $3.5 and $5 billion in investment over five years to achieve full implementation, data indicated that foreign investments in the country’s telecoms sector have declined.
CAPEX surge
Meanwhile, the NCC report also revealed a dramatic rise in domestic capital expenditure (CAPEX) for the operators in 2024, reaching an unprecedented N2.9 trillion, representing a 159.03% year-on-year increase compared with N1.12 trillion in 2023.
The NCC report attributes the sharp rise in CAPEX partly to the unification of exchange rates, which merged the Central Bank of Nigeria (CBN) and parallel market rates, and the impact of rising inflation on the value of the naira.
These factors significantly increased the cost of network expansion and infrastructure upgrades, most of which depend on imported equipment.
In 2024, telecom operators invested heavily in network modernization, fiber expansion, and 5G rollout projects, even as the weakening naira inflated the naira value of foreign-denominated transactions. The NCC noted that the industry’s CAPEX figures not only reflect new infrastructure builds but also the cost implications of maintaining competitive service quality amid economic headwinds.
Revenue growth masks underlying cost pressures
Despite the surge in expenses, the telecom sector maintained strong revenue growth in 2024, with total earnings rising by 44.7% to N7.67 trillion, compared to N5.30 trillion in 2023.
- Increased demand for data services, higher subscription rates, and expanded enterprise solutions helped operators cushion the effects of rising operational costs.
- The NCC data confirms that despite economic volatility, the telecom sector remains one of Nigeria’s most resilient contributors to GDP growth.
What you should know
Worried by the rising cost of operations and the record losses being recorded by the telecom operators, the NCC in January this year approved a 50% tariff increase for the telecom operators.
This means the operators can pass part of the costs to the consumers, who are now paying more for data, voice and SMS services.
With the tariff adjustment, some of the loss-reporting big telcos, especially MTN, have now returned to profitability, judging by their 2025 9-month financial results.
