Nigeria’s telecommunications sector grappled with severe financial strain in 2024, as total operating expenses (OPEX) surged to an all-time high of ₦5.85 trillion, marking an 85% jump from ₦3.16 trillion in 2023, according to the latest data from the Nigerian Communications Commission (NCC).
The NCC attributed the sharp rise primarily to high Right-of-Way (RoW) fees, sustained inflation, exchange rate volatility, and escalating energy prices that have significantly impacted operators’ balance sheets.
“Most licensees complained of high Right of Way (RoW) fees, harsh microeconomic conditions, and rising inflation. However, the NCC has been able to secure zero Right of Way (RoW) fees in some states in 2024,”
the Commission stated in its report.
Right-of-Way Dispute Deepens
Right-of-Way (RoW) charges, fees telecom companies pay to lay fiber-optic cables across public roads, remain one of the biggest hurdles in expanding broadband infrastructure nationwide.
Despite the NCC’s continuous engagement with state governments to harmonize or abolish these fees, some states still impose excessive rates, far exceeding the federal benchmark of ₦145 per linear meter set in 2020.
A recent industry list showed:
- Ogun State: ₦9,477 per meter (highest in the country)
- Lagos: ₦6,264;
- Oyo: ₦5,303;
- Cross River: ₦4,737;
- Rivers: ₦4,047
- Edo: ₦3,491;
- Ondo: ₦3,075
The NCC Executive Vice Chairman, Dr. Aminu Maida, recently disclosed that five new states, Adamawa, Bauchi, Enugu, Benue, and Zamfara, had joined others in waiving RoW fees.
This brings the total to 11 states now offering zero-cost RoW, aimed at accelerating broadband expansion.
Broadband Target Slips Further
Despite the progress, Nigeria’s ambition to achieve 70% broadband penetration by the end of 2025 appears increasingly unattainable.
As of September 2025, broadband penetration stood at 49.3%, highlighting the challenge posed by high infrastructure deployment costs and bureaucratic delays.
“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 ₦145 per meter,”
said NCC chief Dr. Maida.
The elevated fees have inflated rollout costs and delayed projects, with many operators forced to scale down or postpone network expansions.
ALTON Chairman, Engr. Gbenga Adebayo, said the broadband plan’s slow progress was due to persistent structural barriers.
He listed multiple taxation, hidden levies, and high RoW costs as major deterrents.
“Some states that claim to have waived Right-of-Way fees still impose hidden costs such as education taxes and highway levies, which discourage investment,”
Adebayo said.
He added that while the National Broadband Plan projected $3.5–$5 billion in investments over five years, foreign capital inflows into the telecom sector have since declined.
Capital Expenditure Skyrockets
The NCC report also revealed that telecom operators’ capital expenditure (CAPEX) surged by 159% year-on-year, rising from ₦1.12 trillion in 2023 to ₦2.9 trillion in 2024.
The spike was linked to the unification of exchange rates, which merged the Central Bank and parallel market rates, and persistent inflationary pressures that weakened the naira.
As a result, network expansion and 5G projects became significantly more expensive, given the dependence on imported equipment.
The NCC noted that CAPEX figures reflect not only new infrastructure development but also rising maintenance costs required to sustain service quality amid economic volatility.
Revenue Rises, But Costs Outpace Gains
Despite mounting expenses, the telecom industry recorded strong revenue growth, earning ₦7.67 trillion in 2024, up 44.7% from ₦5.30 trillion in 2023.
Growth was driven by higher data demand, subscription increases, and enterprise service expansion, which helped offset the cost surge.
The NCC affirmed that the telecom sector remains one of Nigeria’s most resilient contributors to GDP, even under pressure from inflation and foreign exchange challenges.
Tariff Adjustment Offers Temporary Relief
In response to rising operational losses, the NCC in January 2025 approved a 50% tariff increase for telecom operators.
This allowed companies to partially transfer costs to consumers, resulting in higher data, voice, and SMS rates.
The tariff review has helped some operators—particularly MTN Nigeria—return to profitability, based on their nine-month 2025 financial results.
