Nigeria’s telecom operators spent ₦5.85 trillion on operations in 2024, an 85% difference from ₦3.16 trillion the previous year, an increase in costs that lays bare the high expenses affecting one of the country’s most important economic sectors.
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.
