Nigeria’s Telecom Industry Faces $870M Investment Shortfall by 2026
By DAYO ADESULU
Delayed Tariff Increases Stifle Infrastructure Expansion
LAGOS, NIGERIA – Nigeria’s telecommunications sector is on track to suffer a massive $870 million decline in capital investments by 2026, primarily due to 11 years of delays in tariff hikes, according to an internal document from MTN Nigeria obtained by The PUNCH.
Plummeting Investments Threaten Network Quality
In 2022, Nigerian telecom operators collectively invested $1.41 billion in capital expenditures, but this figure fell to $1.16 billion in 2023. The downward trend is expected to continue, with investments projected to plummet to $470 million by 2025—a staggering 67% drop from 2022 levels.
By 2026, spending is forecasted to remain critically low at $500 million, marking an $870 million deficit compared to 2022.
Tariff Hike Delays and FX Crisis Worsen Outlook
The telecom industry’s capital expenditure decline is largely driven by the inability to adjust tariffs over the past decade, which has restricted funds needed for:
✅ Expanding network coverage
✅ Upgrading technology
✅ Launching new services
The Nigerian Communications Commission (NCC) has recently approved a 50% tariff hike, set to take effect in February 2025—the first such increase in over a decade. This move is expected to help telecom firms offset rising operational costs and revive network investment efforts.
MTN & Airtel Scale Back Investments Amid Economic Challenges
Both MTN Nigeria Communications Plc and Airtel Africa Plc have announced reductions in network investments due to:
📉 Forex-induced losses in 2023 & 2024
📈 Rising operational expenses
💰 Efforts to minimize foreign exchange exposure
This strategic shift, outlined in their financial statements for Q3 2024, aligns with earlier forecasts of a capital expenditure decline in the coming years.
Industry Leaders Sound the Alarm
The Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), Gbenga Adebayo, warned that declining investments are already impacting network quality:
“If you don’t invest in a sector, you can’t talk about the quality of service; you can’t talk about the right pricing. The government must help, and the time is now.”
What’s Next for Nigeria’s Telecom Industry?
While the NCC-approved tariff hike offers a potential financial relief, telecom firms must navigate economic volatility, FX fluctuations, and high operational costs to sustain infrastructure development.
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