Telecom
Why Nigeria’s Telecoms Sector Needs Government, New Regulatory Interventions
The Nigerian Telecommunications industry is currently considered a key sector that contributes to economic growth and one that can help lift Nigeria out of recession.
Obviously, the impact started at the point of liberalisation of sector almost two decades ago, catalysed and opened up the sector to local and foreign direct investment (FDI) estimated at over $68 billion as at November 2016.
It has created approximately over 2.5 million jobs over the past 10 years, its impact reaches across all industries and holds the potential to modernize multinationals, SMEs and their supply chains.
The sector continues to provide mobile banking services to help bank the unbanked, provides access to e-learning platforms to help facilitate training and development, and brings healthcare services to rural regions, via telemedicine and text message counselling, amongst many other services.
Until June 2016, the telecoms sector was growing rapidly and comprised 9.8% of Nigeria’s GDP but this growth has now stalled, with the sector at a strategic crossroads. Several factors have converged simultaneously, which could materially impact the industry and undermine its potential to drive economic growth and stimulate the Nigerian economy as a whole.
For starters, from a systemic standpoint, the current weakness in the local economy has resulted in relatively low consumer purchasing power and continues to place pressure on the industry and its operators.
The weak Naira has made the importation of much needed telecom equipment into the country difficult, and the upgrading of towers and service capacity expansion too expensive to conduct on a large scale.
Operators are now either deferring or delaying upgrades or expansion of their networks and customers are starting to feel the impact. Signal quality has been affected, incidences of dropped calls have increased, and overall customer service quality has declined. Nigerian consumers have every right to demand more and should never have to settle for poor network quality or services.
To further compound matters, consumers continue to move away from legacy voice services and are switching to data bundle packs, which allows them use over the top (OTT) service providers such as WhatsApp, Skype and Facebook to make phone calls inexpensively over broadband connectivity not minding the often poor quality of these services.
While it’s clear that the simple solution to addressing this trend is massive investment into telecom tower network densification, as new 3G and 4G technologies are rolled out, these network upgrades can only be done if there is adequate financing and a suitable business case.
Moreover, there is an ongoing data bundle “price war” between incumbent telecom operators and internet service providers; with a frantic race to deliver cheap gigabytes of data, for rock bottom prices.
On the surface, these prices appear good for the consumer in the short term, but in the long run, this price war will put many operators out of business, as these current bundled offerings are priced well below their actual costs to network operators.
According to Research ICT Africa, the price of data has decreased by over 65% over the past two years, squeezing margins and pushing smaller mobile network operators to the brink of collapse.
Short Term versus Long Term Gains
Artificially low data prices are designed to drive out competition. This type of practice is called “predatory pricing” in respect of which there are restrictions in many parts of the world. These pricing wars never work out well for consumers, as they typically result in initial temporary low service prices, just long enough to force out the competition.
Then, all of a sudden, the few remaining players monopolize the market and suddenly double, or even quadruple prices, as they are the surviving and dominant game in town. It’s easy to identify anti competitive pricing, as we know what it costs the telecom industry to secure internet bandwidth.
A good example of healthy competition which has led to improved quality and product service offerings is mobile phones. The competition between Apple and Samsung and others has forced all parties to constantly launch new and improved products.
Competition leads to fair market pricing which has enabled mobile phones to be purchased by the masses. The current problem in the telecoms sector is that we don’t have fair market pricing -the price of data bundles in Nigeria is presently amongst the lowest in Sub Saharan Africa.
While market forces drive the industry, governments and regulators must shape the mobile economy by setting the policies and regulations that will deliver a healthy, competitive and sustainable mobile sector alongside consumer protection for all citizens.
Feasible Solution
Given the tremendous potential that telecommunications has to jump start and stimulate the Nigerian economy at all levels, we need the help of government and regulators to play the role of referee and establish a level playing field.
Fatai Folarin, Tax & Regulatory Services Lead Partner at Deloitte noted that, “The telecommunications industry in Nigeria is one that can currently be described as self-aware and steadily adapting to the stark realities of business – changing trends, intense rivalry, regulatory uncertainties etc. There is a general understanding that to remain sustainable, there is a need to recreate existing products, diversify into new areas for which the capabilities and resources are near, improve on general business processes and navigate through the regulatory landscape.”
We recognize the free market principles of business and competition, but we also note the artificially low prices that are having a negative effect on investment and growth within the sector.
Both large and small mobile network operators are currently working to try and mitigate the current challenges related to squeezed margins, and in other cases generating losses, and lack of direct access to foreign currencies, with the smaller firms struggling the most to compete. Reduced competition will be a lose-lose situation for all operators, and the public as a whole.
The recent default status of Etisalat Nigeria, is a prime example of how it can all go wrong. Etisalat is the fourth largest telecom operator in the country, but as a direct result of the company’s razor thin margins on its current service offerings, and against the backdrop of the devaluation of the Naira, the company has failed to meet its obligations to its lenders.
Concerted regulatory efforts need to be made to ensure that all sides survive and the quality of service levels continue to be enhanced, by having the regulatory bodies insist the mobile network operators focus on additional customer metrics such as, measuring their signal reach, network uptime and improved quality of a data services.
A regulated price minimum price level will help stop the downward spiral of the telecoms industry and allow all telecom players, big and small, to compete on network service and customer service quality. Policy makers must therefore ensure that all current players survive.
The Nigerian Communications Commission (NCC) can issue more spectrum licenses and make up revenues when additional spectrum is auctioned and mobile network operators roll out into new rural areas.
We also need to consider the telecoms sectors as critical to our nation’s economic development and, as such, place the sector on the critical national infrastructure list
This important designation will give operators priority access to much needed foreign exchange and the procurement and purchase of telecom upgrade equipment for the networks.
In conclusion, mobile network operators serve millions of SMEs and multinationals that are dependent on internet access and other enterprise solutions – a half day service disruption results in large revenue losses for various businesses throughout the country.
It is therefore very important that the government, regulators and international institutions continue to define and refine strategies to increase growth and ensure the long-term sustainability of the Nigerian telecommunications sector, thereby also boosting investors’ confidence and signalling to the international community that we truly remain open for business.
The need for Nigeria to think outside the box in its need to drive towards global relevance with innovations and scientific developments will be on the front burner at the NITRA Innovative & Scientific Conference scheduled to hold on Thursday July 23, 2026 in Ikeja, Lagos.
NITRA
The Nigerian Communications Commission (NCC) will lead other delegates to discuss and take far-reaching decisions at the event, which has its theme as “Bridging Nigeria’s Digital Divide With Scientific Innovation”.
Other companies that have indicated interest in partnering with NITRA include mobile communications company, Tecno; Africa’s premier end-to-end AI solutions company, Hyperspace; and telecommunications data infrastructure company, Digital Realty.
Speaking on the proposed event, the Chairman, Nigeria Information Technology Reporters Association (NITRA), Chike Onwuegbuchi noted that the event will seek to create a platform for government and private organisations to deliberate on policies around scientific innovations in Nigeria, challenges, place of indigenous and foreign collaboration, roles of each stakeholder, and grassroots development in that regard, among others.
According to him: “The Federal government, with series of programmes and partnerships, has established the urgent need to create an ecosystem that thrives on scientific innovation, breeding institutions and individuals with a target of placing the country at the fore-front of Next-Gen development.
It is a known fact that digital and scientific innovations are crucial, not only to the survivability of a nation, but also to the sustainability of its growth and development, with significant effect on economic strength, global image, defense and security, government capabilities to function, and public health and safety, communication and digital footprint, among others.
The federal government is actively driving scientific innovation to foster economic diversification and build a $1 trillion economy by 2030. Efforts are heavily focused on commercializing research, establishing massive research funds, and funding strategic infrastructure, particularly in technology, biotechnology, and healthcare. Core government initiatives and policies include the newly instituted National Research and Innovation Development Fund (NRIDF), which aims to mobilize about $500 million annually to support research and the commercialization of scientific outputs; and the Nigeria Genomic City, a multi-ministerial initiative aimed at transforming Nigeria into a leading hub for genomics, precision medicine, and biotechnology. It is designed to protect indigenous data, stimulate artificial intelligence in health, and develop a highly skilled scientific workforce.
According to the General Secretary of NITRA, Mr. Chidiebere Nwankwo, the forum will also be a vehicle to propagating the views of decision makers to the public, thereby furthering the cause of public awareness and information dissemination on the topic.
The focus, he said will be on how Nigeria can sustain digital innovative growth and scientific development in Nigeria
The board of global payments company, PayPal, says a 53 billion dollars takeover offer from financial technology firm, Stripe, and private equity company, Advent International, does not adequately reflect the company’s long-term value.
PayPal
According to reports, the proposed acquisition, valued at 60.50 dollars per share, remains under consideration, with the board yet to formally respond to the offer.
The directors are said to be evaluating not only the financial value of the proposal but also the structure of the financing, the timeline for completing the transaction and the likelihood of obtaining regulatory approvals.
They are also considering the possibility of competing bids emerging.
Although the offer represents a premium of about 28 per cent above PayPal’s recent share price, the board believes the company could deliver greater value to shareholders if its ongoing turnaround strategy succeeds.
Following reports of the bid, PayPal shares gained about two per cent to close at 56.73 dollars.
Sources familiar with the discussions said Stripe and Advent have secured approximately 50 billion dollars in debt financing from JPMorgan and Morgan Stanley, while both firms would jointly contribute 17 billion dollars in equity.
Under the proposal, the two companies would jointly own PayPal instead of dividing its operations.
PayPal, Stripe, Advent International, JPMorgan and Morgan Stanley have all declined to comment on the proposed transaction.
The discussions come as PayPal seeks to strengthen its business after years of increasing competition from rivals including Apple Pay, Google Pay and emerging financial technology firms.
The company, which was valued at about 360 billion dollars in 2021, now has a market capitalisation of approximately 36 billion dollars.
Since assuming office as Chief Executive Officer in March 2026, Enrique Lores has embarked on a restructuring programme aimed at improving operational efficiency and restoring growth.
The restructuring includes the creation of three business divisions comprising Checkout, Venmo and Consumer Financial Services, and Payments and Crypto.
The company is also targeting 1.5 billion dollars in cost savings through the deployment of artificial intelligence technologies.
PayPal’s latest financial results indicated signs of recovery, with first-quarter revenue rising seven per cent year-on-year to 8.35 billion dollars, while total payment volume increased by eight per cent to 464 billion dollars.
If approved, the transaction would combine two of the world’s largest digital payments companies.
The combined business would process an estimated 3.7 trillion dollars in annual payment volume, significantly strengthening its position in the global online payments market.
However, analysts expect the proposed acquisition to face intense regulatory scrutiny because of the companies’ combined market share in merchant payment services.
To address possible antitrust concerns, the bidders have reportedly considered options, including separating PayPal’s Braintree business or other assets if required by regulators.
Sources said Stripe and Advent remain interested in pursuing the acquisition despite the board’s reservations, although negotiations are expected to continue.
Market observers are also awaiting PayPal’s earnings report scheduled for July 28 for further indications of the company’s financial recovery and future growth prospects.
Concerns over network reliability and its impact on Nigeria’s growing creator economy took centre stage at MTN Nigeria’s Data on Trial event, where content creator and streamer, Jarvis, challenged telecommunications operators to improve connectivity for digital creators.
Speaking during the event, Jarvis asked whether there were locations in Nigeria where uninterrupted internet connectivity could support real-life (IRL) streaming without network disruptions.
“Are there places where there is no breakage when streaming IRL?” she asked.
Her question highlighted the challenges faced by content creators who depend on stable internet services for live streaming, content uploads and real-time engagement with audiences.
Responding, MTN Nigeria’s Chief Technical Officer, Mr Yahaya Ibrahim, said network performance depends on several factors, including location, network coverage, device capability and the number of users connected to a particular base station.
He noted that operators continue to invest in expanding network capacity to meet the growing demand for data services.
Earlier, MTN’s General Manager, Network Performance and Quality Assurance, Mr Michael Ndukwe, explained the evolution of mobile network technology in Nigeria, from first-generation (1G) services to the current fifth-generation (5G) technology.
According to him, each phase of technological advancement has significantly increased network capacity and enabled new digital services.
Ndukwe cited Nigerian Communications Commission (NCC) data showing that Nigerians consumed about 13.2 million terabytes of data in 2025.
He added that data usage reached approximately 4.06 million terabytes in the first quarter of 2026, reflecting the country’s increasing reliance on digital platforms and online services.
According to him, the growth is being driven by wider adoption of 4G and 5G networks, increased smartphone penetration, the proliferation of smart devices and expanding use of social media platforms.
Participants at the event noted that as more Nigerians build businesses and careers around digital content, access to reliable and high-speed internet has become critical to sustaining the country’s digital economy and creator ecosystem.
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