According to the Nigerian Communications Commission (NCC), this escalation was driven by inflation, exchange rate volatility, growing costs of energy, and above all, inconsistent Right of Way (RoW) fees that continually chokes network expansion across states.

“Most Licensees complained of high Right of Way (RoW) fees, harsh microeconomic 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 its 2024 industry report.

Uneven Fees, Unequal Access

Despite the Governors Forum’s 2020 resolution setting RoW charges at ₦145 per linear metre, some states have ignored the guideline. Operators disclosed that Ogun State now demands ₦9,477 per metre, the highest nationwide, followed by Lagos (₦6,264) and Oyo (₦5,303).

Others, including Cross River (₦4,737), Rivers (₦4,047), Edo (₦3,491), and Ondo (₦3,075), have also imposed heavy levies. The disparity has slowed broadband rollout, forcing firms to revise deployment plans or suspend network projects entirely.

However, there’s progress. Eleven states have now eliminated RoW fees, according to Dr Aminu Maida, the NCC’s executive vice chairman. “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,” he said.

The Commission confirmed that Adamawa, Bauchi, Enugu, Benue, Zamfara, Anambra, Katsina, Kebbi, Nasarawa, Osun, and Plateau have all adopted zero-cost policies to support broadband rollout.

Broadband Goals Falter

The government’s vision to achieve 70% broadband penetration by 2025 is now clearly out of reach. Data from the NCC shows that as of September 2025, penetration stood at 49.3%, well below target.

Experts say the shortfall is financial, not just technical. Each kilometre of fibre delayed by high state fees represents a lost opportunity to extend digital inclusion.

Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), said unresolved structural issues are a drag on progress. He pointed to multiple taxation, hidden levies, and high RoW costs as contributing challenges.

He also noted that while some states have waived fees, they continue to impose “education taxes” and “highway levies” under different names, eroding the benefits of those waivers.

High Investment, Shrinking Margins

The NCC report revealed that capital expenditure by telecom operators surged 159% to ₦2.9 trillion in 2024, up from ₦1.12 trillion the previous year. The increase, the Commission said, reveals both aggressive investment in network upgrades and the inflationary impact of the naira’s sharp depreciation following the Central Bank’s exchange rate unification policy.

Telecom companies have spent heavily on 5G rollout, fibre expansion, and network modernisation. Yet, much of that spending has been absorbed by currency losses and rising import costs for equipment.

While revenues climbed 44.7% to ₦7.67 trillion, the profits have barely offset the inflationary and fiscal pressures facing operators, as Nigeria’s telecom costs continually surge.

Tariff Hike Brings Temporary Relief

To ease the burden, the NCC in January 2025 approved a 50% tariff increase for telecom services, a controversial but necessary step, according to industry analysts. The revision allowed major operators, including MTN and Airtel, to return to profitability after reporting significant losses in 2024.

However, the higher tariffs have also limited consumers, particularly low-income users, prompting warnings from advocacy groups about potential digital exclusion in rural and underserved communities.

Policy Flashpoint and the Road Ahead

With telecoms contributing 16.1% to Nigeria’s GDP in Q2 2025, the sector has become the second-largest non-oil contributor to the economy. But then, the persistence of uneven RoW charges has turned the issue into a national policy flashpoint.

Stakeholders are now urging federal intervention to harmonise fees nationwide, arguing that broadband rollout, essential for education, finance, and digital commerce, should not depend on a state’s internal revenue strategy.

For Nigeria’s competitive edge to remain, policymakers must choose between short-term state revenue and long-term national connectivity, ensuring telecom costs are reduced. The choice, as the numbers show, can no longer be delayed.

ALTON says that multiple levies, bottlenecks in right-of-way approvals, and other unfriendly state policies are slowing expansion and could widen connectivity gaps between regions.

Speaking over the weekend, ALTON Chairman, Engineer Gbenga Adebayo, said the telecom industry is finally seeing strong investment flows after years of stagnation, but not every state may benefit.

“States that create hostile conditions for telecom operations risk being left behind. Where deployment is unwelcome, investments will move to more supportive neighbouring states, and citizens of unfriendly states will inevitably suffer limited connectivity,” Adebayo said.

He stressed that operators are already under enormous pressure, paying as many as 56 different taxes and charges. According to him, relief is expected from January 2026 when the Federal Government’s tax reform bills come into effect, cutting overlapping levies across federal, state, and local tiers. “We will not continue to solicit endlessly for cooperation,” Adebayo warned.

Fresh data from the Nigerian Communications Commission (NCC) shows over $1 billion in telecom infrastructure investments poured into the country this year alone. 

That confidence was restored after the regulator allowed mobile network operators to adjust tariffs by up to 50%, reversing almost a decade of frozen pricing.

This policy change has triggered aggressive expansion as operators are rolling out new base stations, extending fibre networks, upgrading existing sites, and introducing enhanced site security to counter vandalism. 

Adebayo described the current pace of deployment as the most ambitious since before the COVID-19 pandemic.

The reforms go beyond tariffs and taxation. The inauguration of the new NCC Board, chaired by Idris Olorunimbe, has been described as a stabilising factor for the industry. 

The rebranding of 9Mobile to T2 is also seen by stakeholders as a signal of renewed investor interest and strategic repositioning.

Industry players argue that these developments place Nigeria in a better position to close broadband gaps and expand access to digital services. But without cooperation at state level, experts warn, the benefits will remain unevenly distributed.

Behind the numbers, operators continue to burn through more than 40 million litres of diesel monthly, most of it imported, to keep networks running. This reality adds to operational costs and stresses why hostile state policies only worsen the financial strain.

The NCC is already working with the Office of the National Security Adviser to create region-specific rapid response systems to protect telecom infrastructure, but Adebayo urged the public to take responsibility as well. Cases of vandalism and stolen equipment, he warned, further undermine investments and slow deployment.

For ordinary Nigerians, unfriendly state policies could mean slower broadband rollout, fewer digital jobs, and reduced access to critical online services. On the other hand, states that actively support operators stand to benefit from expanded infrastructure, stronger investor confidence, and broader digital inclusion.

“The transformation we are witnessing in our sector has not been experienced in recent years… but for this to be sustainable, all stakeholders, especially state governments, must play their part. Telecoms is not just about calls and data, it is a driver of national economic stability and growth,” Adebayo concluded.

This was disclosed by the Minister of Communications and Digital Economy, Bosun Tijani following a meeting with President Bola Tinubu, where participants of the Senior Executive Course 46 at the National Institute for Policy and Strategic Studies (NIPSS), Kuru, presented their report on Nigeria’s digital economy.

RoW fees are levied on telecom companies for laying fibre optic cables and other infrastructure necessary for internet connectivity. These charges have long been a stumbling block to broadband expansion, as differences across states have slowed investments.

While the federal government had previously set a benchmark fee of ₦145 per linear metre, some states imposed higher charges, discouraging telecom operators.

Tijani noted that all states would eventually comply, pointing out that before now, only seven states—Zamfara, Katsina, Anambra, Kebbi, Nasarawa, Bauchi, and Adamawa—had waived the fees.

Recommendations from NIPSS

The NIPSS report, titled Digital Economy, Youth Empowerment and Sustainable Job Creation in Nigeria: Issues, Challenges and Opportunities, included an eight-point recommendation to enhance Nigeria’s digital economy. One of the key suggestions was for the federal government to push for a complete waiver of RoW fees nationwide.

Other proposals included:

• Issuing an Executive Order for all Ministries, Departments, and Agencies (MDAs) to migrate to the OneGov.ng portal.

• Adopting a Quintuple-Helix Model to drive the digital economy and job creation.

• Providing long-term funding for the 3MTT digital skills programme.

• Accelerating Nigeria’s transition from IPv4 to IPv6.

• Establishing Digital Health Innovation Hubs across the country.

• Developing a preventive maintenance application for the automotive industry.

Tijani noted that Nigeria is making strides in the migration from IPv4 to IPv6 and is on course to be among the first African nations to achieve full transition.

He also highlighted the government’s approval of a $2 billion investment to deploy 90,000 kilometres of fibre optic cables nationwide, making Nigeria’s broadband network the third-largest in Africa, behind South Africa and Egypt.

The project is supported by the Ministry of Finance and has secured a $500 million commitment from the World Bank.

Tinubu’s Response

President Tinubu directed the Minister of Communications and Digital Economy to work with relevant agencies to ensure the recommendations are implemented effectively.

He reiterated his administration’s focus on youth empowerment and digital innovation, stating, “At the core of our administration is youth empowerment. We cannot relent on that, and we need everyone’s collaboration. I have listened carefully to your recommendations and the thorough work you did. We will continue to engage the Institute as a resource centre and Think Tank.”

Even with works to regulate RoW fees, some states still charge high rates, with Ebonyi reportedly demanding fees up to 69 times higher than Ekiti, which has one of the lowest costs. According to GSMA, if all states adhered to the ₦145 per metre standard, national network rollout costs could drop by about 15%.

The waiver by 11 states will help in reducing broadband costs and increasing internet penetration, but further cooperation from state governments is needed to ensure seamless digital infrastructure deployment across the country.