Telecommunications companies MTN, Airtel, and Globacom inject a combined total of $1 billion into Nigeria's telecom sector following a tariff increase.
Nigeria's Telecom Sector Experiences Infrastructure Boost Following Tariff Increase
A significant shift has taken place in Nigeria's telecom industry, with operators like MTN, Airtel, and Globacom investing heavily in network upgrades and infrastructure development. This transformation is attributed to a 50% tariff hike approved by the country's regulatory authorities in January 2025 [1][3][4].
The increased revenues generated from the tariff adjustment have provided operators with the necessary funds to reinvest in their networks. This is evident in the double-digit growth in data revenues for companies such as MTN, whose data income grew by over 69% year-on-year [2].
These additional funds are being channelled towards infrastructure upgrades to enhance network quality and coverage. Sources suggest that a $1 billion telecom investment is underway, aiming to improve telephone service quality within nine months of 2025 [5].
Operators are not only focusing on network improvements but also preparing for future technologies. For instance, Globacom, despite lowering its international call rates, has implemented the approved tariff hikes on data plans for other services, indicating a strategic balancing of pricing and service improvements [3].
However, the tariff hike has brought about affordability challenges for a significant portion of Nigerian users. Data prices have increased by about 50%–200% on some plans, leading to a reduction in new internet subscriptions by over 1 million in the first half of 2025. This has slowed down internet adoption growth and particularly impacted low-income users [1][2].
The trade-off between recouping investment costs through tariffs and promoting digital inclusion is a delicate balance that operators must navigate.
In parallel with these developments, the government has pursued ambitious broadband expansion plans, including projects such as 90,000 kilometers of new fiber and 7,000 additional towers worth over ₦3.3 trillion [6].
The tariff increase is seen as a return to consistent, market-driven policy in Nigeria. The move is not just about generating short-term cash flow; it's about attracting and retaining foreign capital, essential for the continued growth and development of the telecom sector [7].
Equipment for telecom networks is primarily manufactured abroad, in countries like China, Finland, and Sweden [8]. However, the commissioning of the Dangote refinery may improve diesel supply and reduce costs in the future, potentially benefiting the sector [9].
In conclusion, the 50% tariff hike in Nigeria’s telecom sector has strengthened operators’ financial capabilities, facilitating increased infrastructure spending and network upgrades that aim to improve service quality. However, the higher costs risk limiting internet accessibility for many Nigerians, creating challenges for user growth despite improved network investments.
References: [1] Nairametrics (2025). Nigeria's Telecom Sector Faces Affordability Challenges After Tariff Hike. [Online] Available at: https://www.nairametrics.com/2025/06/15/nigerias-telecom-sector-faces-affordability-challenges-after-tariff-hike/
[2] Premium Times (2025). Data Prices Soar, Internet Subscriptions Drop Following Tariff Hike. [Online] Available at: https://www.premiumtimesng.com/business/telecoms/453827-data-prices-soar-internet-subscriptions-drop-following-tariff-hike.html
[3] Vanguard (2025). Globacom Lowers International Call Rates, Hikes Data Plans. [Online] Available at: https://www.vanguardngr.com/2025/04/globacom-lowers-international-call-rates-hikes-data-plans/
[4] ThisDay (2025). Tariff Increase: NCC Reports Over $1 Billion in Fresh Infrastructure Spending. [Online] Available at: https://www.thisdaylive.com/index.php/2025/05/12/tariff-increase-ncc-reports-over-1-billion-in-fresh-infrastructure-spending/
[5] BusinessDay (2025). Operators to Channel Increased Revenue into Infrastructure Upgrades. [Online] Available at: https://www.businessdayonline.com/telecoms/article/operators-to-channel-increased-revenue-into-infrastructure-upgrades/
[6] NCC (2025). NCC Outlines Plans for Broadband Expansion and 5G Rollout. [Online] Available at: https://ncc.gov.ng/news/ncc-outlines-plans-for-broadband-expansion-and-5g-rollout
[7] Financial Times (2025). Nigeria's Telecom Tariff Hike Attracts Foreign Investment. [Online] Available at: https://www.ft.com/content/3a8535c0-a436-4895-a782-d947597e590c
[8] TechCabal (2025). Nigeria's Telecom Equipment is Primarily Manufactured Abroad. [Online] Available at: https://techcabal.com/2025/04/15/nigerias-telecom-equipment-is-primarily-manufactured-abroad/
[9] Guardian (2025). Dangote Refinery to Boost Diesel Supply, Reduce Costs for Telecom Sector. [Online] Available at: https://guardian.ng/business-services/dangote-refinery-to-boost-diesel-supply-reduce-costs-for-telecom-sector/
- The increased revenues from the tariff hike have led operators to invest in innovation, with MTN, Airtel, and Globacom focusing on technology, especially in network upgrades and infrastructure development.
- The government's investment in education-and-self-development and general news sectors could be further augmented, as better network quality and coverage will facilitate easier access to online resources and information.
- Despite the tariff increase making mobile technology more expensive for some Nigerian users, the growth of the telecom sector will likely attract foreign investment, driving innovation and influencing the sector's continuous development in the long term.
