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Adapt or Die: Nigeria’s Telecoms Sector’s Chance at Survival Amid Economic Turmoil

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Dr. Roseline Oluwaseun Ogundokun
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By Dr. Roseline Oluwaseun Ogundokun

When the Global Systems for Mobile Communications (GSM) was first introduced into the Nigerian market in 2001, the acquisition of a cellular device swiftly became a badge of distinction, signifying one’s immersion in the technological revolution of the 21st century.

Adapt or Die: Nigeria's Telecoms Sector's Chance at Survival Amid Economic Turmoil

Dr. Roseline Oluwaseun Ogundokun

The devices became the exclusive purview and financial burden of the elite, relegating many middle-class households to sharing a solitary device among its members. It was expected.

The cost of procuring a Subscriber Identity Module (SIM) hovered between N40,000 to N50,000 (about $384 to $480 at the time), while iconic models such as the NOKIA 3310 and Samsung series commanded prices exceeding N80,000 (about $769) to over N100,000 (about $961). At inception, networks operated within the 900 and 1800 MHz spectrum with a billing structure set at about N50 per minute, until the introduction of the per-second billing system. As such, barely 10% of the country’s 125-million population could afford to own a device with regular credit recharge.

But before the arrival of such devices with an unattainable luxury status for the economically disadvantaged, Nigerians had long grappled with problematic services from the oft-maligned Nigerian Telecommunications Limited (NITEL). Until 2001, NITEL’s 16-year operation was plagued with citizen discontent over poor management as it maintained monopoly over Nigeria’s telecommunications and data services. The arrival of GSM — spearheaded by MTN, Econet (now Airtel) and MTEL months apart in 2001, and Globacom two years later in 2003 — to relieve the troubled service provider, therefore, changed everything.

In mobile phone accessibility and internet service affordability progress since that time, the numbers have been staggering. By 2022, two decades after GSM introduction, more than 222 million mobile phone subscribers existed in Nigeria according to the Nigerian Bureau of Statistics and the Nigerian Communications Commission (NCC), out of which over 215 million were active. The projections for the future are just as phenomenal. A steady surge in smartphone adoption is expected across the country from 2024 to 2029, with the user base estimated to reach a new peak in the next five years.

Network subscriptions are also at the lowest they have ever been. Mobile data subscriptions in Nigeria, today, are available for as low as N25 while call rates go as low as 9 kobo per second. However, considering Nigeria’s frail economic climate in recent years, providing affordable services to citizens while maintaining high-standard infrastructure presents the greatest challenge for the telecommunications industry and operators in the country.

Nigeria’s economy has experienced two major recessions over the last 10 years and currently faces one of its most difficult periods of uncertainty. Recent market conditions and currency devaluation have plunged the value of the Naira in the foreign exchange market, resulting in skyrocketed prices of commodities. Unfortunately, the telecommunications sector, which contributes approximately 16% to Nigeria’s GDP, is, like other sectors, not immune to the profound repercussions of the prevailing economic upheavals.

The telecoms industry, like many others in the country, is heavily reliant on foreign exchange (FX) for the procurement of essential equipment, infrastructure, and technology. With a significant portion of telecom equipment and services being imported from foreign markets, fluctuations in currency exchange rates directly impact the cost of operations for industry players. As the value of the Naira fluctuates against major currencies such as the US Dollar and Euro, the cost of procuring equipment and services denominated in foreign currencies escalates, placing immense strain on the financial resources of telecom companies.

Mobile network operators in the telecommunications sector, whose tariffs are rigorously regulated by the NCC, therefore, face a dilemma in balancing investments towards sustaining quality and affordable services for their vast subscriber base with their goal of achieving profitability. For a sector battling various environmental and infrastructural impediments including frequent fibre cuts due to road construction and vandalism, right-of-way challenges, and exploitative rent-seeking practices, maintaining operational efficiency amidst prevalent economic adversities become increasingly daunting.

None of these existing challenges are alien to industry regulators and stakeholders. Operators’ advocacy for critical infrastructure protection in the ICT/telecommunications sector in recent years has especially served as a striking illustration of a cry for proactive actions to curtail the profound financial impact of such obstacles on its operations. Yet, while these challenges persist, mobile network operators have remained unflinching in their commitments to ensuring seamless connectivity, service reliability, and pricing affordability for their subscribers.

Despite Nigeria’s headline inflation rate surging to a 27-year peak of 29.9% in December 2023 and reaching 33.2% in March 2024, the telecoms industry, compared to other sectors adeptly adapting to Nigeria’s changing market conditions, continues to find itself traversing the intricate terrain of regulatory compliance and financial viability. In the mobile market which maintains a strong connection to the telecoms sector, for instance, prices of mobile phones, today, have nearly doubled to reflect the rising cost of production and import, while call and data tariffs largely remain the same they have been for over a decade.

A similar rise in cost has been evident in food prices which increased to over 30% in February, impacting the fast-moving consumer goods (FMCG) sector. The sector has since adjusted, with FMCG corporations including brewing companies increasing product prices in tandem with the high cost of raw materials and production. Companies in other sectors providing domestic consumer needs, such as Pay TV companies and Discos, have also duly followed suit by conducting price reviews in recent times.

While these price adjustments may be inconvenient for consumers due to limited purchasing power, they are more than necessary for businesses to continue to meet demands, deliver value to shareholders, and contribute significantly to the Nigerian economy.

It is especially pivotal to recognise the broader socio-economic implications for Nigeria if the telecoms sector sticks with its pricing plans as other sectors adapt. The industry is reputable for its crucial role in driving economic growth, creating employment opportunities, and improving digital inclusion efforts across the country.

Notably, over 15,000 people have been directly employed by licensees in Nigeria’s $75.6 billion telecoms sector, according to a December 2022 report by the NCC. Also, as of second quarter 2023, the Information and Telecommunications industry ranked highly among activity sectors contributing the most to the country’s GDP. Not least of mobile service providers’ critical contributions to socio-economic issues is their position at the forefront of Nigeria’s digital inclusion ambitions, which sees them providing more than 83 million citizens with the opportunity to benefit from prompt information access and exchange necessary for increased social and business productivity.

A lack of adjustments within the sector amidst FX-dependent pressures and rising inflation will indubitably pose a threat to these transformative indicators in the next few years. When telecom companies struggle to maintain and expand their infrastructure, there are higher chances of  network congestion, dropped calls, and slow internet speeds that can undermine productivity, hinder business operations, and diminish the overall quality of communication services. Operators’ ability to invest in infrastructure upgrades, network expansion, and technological advancements could be significantly hampered, significantly impacting coverage and service quality.

They can’t afford to test consumers’ patience in this regard.

Quality of Service (QoS) in the sector is, indeed, deemed non-negotiable among consumers. Regardless of any situation within or beyond their control, operators are expected to uphold high standards of service delivery to remain competitive and retain customer loyalty, and any compromise can have far-reaching consequences. But maintaining and improving on progress made thus far in the sector would be impossible without access to adequate financial resources for further investments. It is, as such, a critical time to employ new adaptive strategies for the sector to achieve profitability and survive in an increasingly competitive landscape.

Operators such as MTN Nigeria, Airtel, Globacom, and 9Mobile have commendably demonstrated an understanding of the grim economic situation’s impact on citizens’ spending power by adhering to regulators’ rules and showing restraint in pushing for higher charges. However, their display of empathy may prove to be their Achilles’ heel in a brutal business and economic climate. Therefore, the review of tariffs to reflect new economic realities, despite regulators’ reluctance, may be long overdue.

At this critical juncture, the onus is on regulators to ensure that consumers are adequately informed about the imperative need for an upward revision of tariffs to secure the industry’s survival. This revision would provide crucial funding for network infrastructure upgrades, necessary for the continued delivery of services.

A measured review of current tariffs, with pricing plans that are adaptive and responsive to the evolving business and economic climate, would enable the industry to mitigate potential socio-economic and business risks. However, regulators must strike a delicate balance between consumer protection and the sustainability of the telecom industry.

The telcos have expressed their readiness to collaborate with regulators on reasonable adjustments in call and data tariffs to mitigate the cost of running their networks. As the Association of Licensed Telecommunications Operators of Nigeria (ALTON) recently stated, “For a fully liberalized and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence.”

As economic pressures on the sector intensify, telcos hope that their concerns will be understood, and urgent action taken to ensure their continued capacity to offer improved services, before the damaging impact of inaction becomes more pronounced than imagined.

Dr. Roseline Oluwaseun Ogundokun serves as a lecturer and SDG 4 Cluster Team Lead at Landmark University’s Department of Computer Science. Additionally, she holds the position of Multimedia Engineering and AI Researcher at Kaunas University of Technology in Kaunas, Lithuania.


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

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Open Access Fabrics Set to Drive Connectivity to Achieve a Digital Economy

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Ayotunde Coker, chief executive officer of OpenAccess Data Centre has described Open Access fabric, the company’s Africa-led interconnection platform as key driver of a digital economy, offering a range of virtual connectivity services from Open Access Data Centres (OADC) facilities.

 

Empowered by West Indian Ocean Cable Company (WIOCC), extensive digital backbone, OAfabric offers enterprises and service providers access to diverse digital ecosystems, supporting user-to-service, user-to-user and site-to-site connectivity.

Coker stated this during a tour of Open Access Data Centre facility in Lagos by some journalists recently.

According to him, “designed as a future-ready foundation, OAfabric unites cloud and local connectivity with OADC’s market-leading colocation solutions, establishing an innovative, scalable African infrastructure platform that addresses both local and global digital transformation demands.

“OA fabric offers a reliable, adaptable interconnection platform to support Africa’s growing digital needs and hybrid infrastructures for local and global providers

“Enabling secure, direct cloud connections, OA fabric supports data sovereignty and fosters local provider growth, OA fabric provides IX peering, virtual interconnection, and tailored IP services for Africa’s digital landscape.

“It’s not about a particular service provider, it’s about everybody. Once you have a network and you are able to route traffic, even if you are not live yet, and you are hoping to come in the future, we are waiting for you to come on board. So, that platform converges everybody.

“With Open Access fabric, everyone is expected to interconnect. You are collaborating with the government. You are collaborating with the banks. We are collaborating with all these guys to interconnect everyone, Microsoft, Google, all the cloud companies connect into it, because we already have the connectivity business”.

He noted that, “Through OA fabric, all the other connectivity providers have access to any content on OA fabric, so SMB, SMEs, MSMEs, who probably doesn’t have a registered business, but on social media, selling clothes and things like that, can have cost effective access to resources on the internet.

Speaking on Metro fiber project which OADC is partnering with WBT, Coker explained that they have covered over 5 million homes in Lagos. “The job of the Internet Service Provider or MNO in the project is to maintain relationship with the residents of that area, make sure that the infrastructure is secured”.

 


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MTN Nigeria and Pan-Atlantic University Invite Media Practitioners for 4th Media Innovation Programme

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MTN Nigeria Communications Plc and the School of Media and Communication, Pan-Atlantic University, have announced a call for applications from qualified media practitioners (including content creators) to participate in the 4th edition of the MTN Media Innovation Programme (MTN MIP-4).

The programme commences on May 19, 2025, on the Main Campus of the Pan-Atlantic University, Ibeju-Lekki, Lagos.

In collaboration with the School of Media and Communication, Pan-Atlantic University, MTN Nigeria launched MIP in 2022 to enable media practitioners gain deeper insight into the ever-evolving media landscape.

The six-month fully funded certificate fellowship, which includes a study visit to the University of Johannesburg, South Africa is open to media practitioners across all strata of the media industry including print, electronic and online platforms. The programme is also open to social media content creators.

“When we launched MIP in 2022, our goal was to enhance media professionals’ reporting capabilities and deepen their understanding of the technology sector, empowering them to become true media innovators. Seeing the impact of the programme over the past three years has been both inspiring and humbling.

“We are proud to continue this initiative and invite all eligible media professionals and content creators to seize this opportunity by applying for the fourth cohort,” said Tobe Okigbo, Chief Corporate Services & Sustainability Officer, MTN Nigeria.

Speaking on the impact of the programme, the Dean, School of Media and Communication (SMC), Pan-Atlantic University, Dr Ikechukwu Obiaya, said that the programme continues to improve and evolve.

“Given the challenges of today’s fast-changing media space, there is an ever-greater urgency to cultivate a new generation of media professionals who will drive innovation and excellence to meet today’s media needs.

“SMC will leverage its extensive experience in training media professionals to equip this next cohort. And we will do this with our usual emphasis on creativity and ethics.”

At the end of the training, the 20 successful applicants, who will qualify as Fellows, will have been trained on Nigeria’s technology sector, the relationship between media and technology and improved content creation opportunities. They will also be equipped with the skills to adapt to the changing realities that guarantee career and financial success in their professional practice. Fellows will also have access to professional resources and mentorship from PAU’s erudite faculty.

Interested journalists, bloggers and content creators can apply at https://bit.ly/MTN_MIP2025

Applications open on Monday, March 24 and close on Monday, April 7, 2025.


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Visa Study Highlights Increased Security Awareness as Digital Payments Thrive Across CEMEA

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A new study commissioned by Visa reveals a rise in consumer awareness and proactive security measures for digital payments across Central and Eastern Europe, the Middle East, and Africa (CEMEA).

The ninth annual Stay Secure study, which surveyed 5,800 adults across 17 diverse CEMEA markets, found that 98% of consumers now actively take precautions to secure their online transactions, showcasing increased savviness as digital payments gain momentum.

While 64% of respondents in Nigeria acknowledge their vulnerability to scams like phishing, the increased adoption of security measures and preference for stronger authentication indicate a positive shift in consumer behavior since the last edition of the Stay Secure study in 2023. Consumers are now actively spotting red flags and verifying the legitimacy of online interactions, showing a marked increase in awareness.

Other key insights emerging from the research bode well for the continued acceleration of digital payments across the region, with over three-quarters of all respondents stating that they mostly or completely trust digital payments, regardless of the threat of fraud. 86% of consumers across Nigeria anticipate that they will increase their use of digital payments over the next year.

“The digital payments landscape is evolving rapidly, and consumers across Nigeria are embracing its convenience while becoming more vigilant about security,” said Andrew Uaboi, Vice President & Head, Visa West Africa.

“Consumer education is our best defense against fraud, and industry collaboration makes this possible. As scams grow more sophisticated, the battle for security never stops. Consumers increasingly trust partners who take tangible steps to protect them.”

The ‘Stay Secure’ study highlights evolving consumer preferences, which could offer Visa’s stakeholders actionable intelligence for trust-building strategies and inform the creation of educational materials to empower consumers against fraud.”

Key Findings of the Visa Stay Secure Study:

– 94% surveyed in Nigeria utilize e-commerce payment methods.
– 82% surveyed in Nigeria are more likely to trust payment programs run by the government (e.g., instant payments, local cards, etc.) if they partnered with a well-known brand like Visa.
-51% surveyed in Nigeria feel more secure using digital payments.
-56% surveyed in Nigeria leverage online credit or debit card payments.
– 54% surveyed in Nigeria note that news about cyber fraud (e.g., data breaches, email scams, phishing, etc.) has impacted their use of digital payments.
– 43% rank Boomers (60-78) as most likely to fall victim to online scams.

Visa’s Commitment to a Secure Digital Future

Visa has been at the centre of AI in payments, investing $3.3 billion in our AI and data infrastructure over the last decade. In 2024, it introduced three new AI-powered risk and fraud prevention solutions, as part of the Visa Protect suite, that are designed to help reduce fraud across immediate A2A and card-not-present (CNP) payments, as well as transactions on and off Visa’s network.

As the world’s largest SaaS platform, Visa combats cybercrime by deploying cutting-edge tools, expertise, and processes to help identify and mitigate fraud. The impact is undeniable: In the past year, Visa blocked $40 billion in fraudulent payment value, prevented 80 million fraudulent transactions, and averted over $122 million in estimated e-commerce fraud through malware detection.


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