Hurdles, opportunities for new entrants into Nigeria’s digital economy

The United Kingdom backed telecom operator, Lebara, has rolled out in Nigeria with its 0724 number series. This followed the Nigerian Communications Commission’s (NCC’s) opening of floodgates to new types of licences to play in the country’s digital economy. Lebara which has secured full interconnectivity with major mobile network operators nationwide unveiled its dedicated number […]

The United Kingdom backed telecom operator, Lebara, has rolled out in Nigeria with its 0724 number series. This followed the Nigerian Communications Commission’s (NCC’s) opening of floodgates to new types of licences to play in the country’s digital economy.

Lebara which has secured full interconnectivity with major mobile network operators nationwide unveiled its dedicated number series in Lagos recently as part of preparations for commercial operations.

President Bola Ahmed Tinubu had welcomed the official launch of Lebara Nigeria, describing it as a strong vote of confidence in the country’s digital economy and its future as a leading technology and investment destination in Africa.

In a statement signed by Bayo Onanuga, Special Adviser to the President (Information & Strategy), the President said: “I congratulate Lebara Nigeria on its official launch. This milestone reflects confidence in Nigeria’s digital economy and underscores the nation’s potential to lead in technology and investment across Africa.”

Daily Trust reports that Lebara’s launch followed groundwork laid in June last year, when the company unveiled its dedicated 0724 number series and secured full interconnectivity with major mobile network operators, a key requirement ahead of commercial rollout.

Speaking in Lagos, Lebara CEO Teniola Stuffman said: “Nigeria stands at a defining moment, a nation of extraordinary talent, resilience, and ambition, yet millions require more inclusive, more affordable, more globally connected digital access. Our entry into the market is driven by this conviction.”

Lebara Nigeria holds a Tier 5 Mobile Virtual Network Operator licence, the highest category under Nigeria’s telecom regulatory framework.

Operating as an MVNO, the company is leveraging national infrastructure through a partnership with Airtel Nigeria, allowing it to focus on product innovation, international connectivity,.and customer experience.

But Stuffman said the partnership would enable Lebara to tap into Nigeria’s growing diaspora economy, cross-border trade flows, and roaming opportunities, positioning the company as a bridge between Nigerians at home and abroad.

Beyond core telecom services, the company disclosed plans to integrate financial and creative-economy support initiatives into its offering. These include microloans, device financing, Lebara-powered internet hubs, and culture-driven events aimed at supporting Nigeria’s arts, tourism, and creative sectors.

 

Lebara’s entrance may break big four dominance

Experts told our reporter that Lebara’s launch could break the dominance of MTN, Airtel, Glo, and 9mobile, who still control roughly 99.5% of the mobile subscriber base.

The Nigerian telecommunications sector, long dominated by the powerful “Big Four” oligopoly, is currently undergoing its most significant structural shift since the GSM revolution of 2001, said Olaiya Atanda, a telecom industry analyst.

“The market will no longer be defined simply by how many SIM cards are active, but by a high-stakes battle between traditional terrestrial giants, disruptive satellite constellations, and a new wave of asset-light digital entrants”, Atanda said.

With broadband penetration finally crossing the 50% milestone in late 2025, the industry has transitioned from a phase of consolidation to one of aggressive expansion.

The battle is becoming fiercer, and Atanda said the survival will be the one who offers Nigerians best services.

Analysts from PwC Nigeria argue that the traditional model of chasing subscriber numbers is dead. Average Revenue Per User (ARPU) has been on a downward trend since 2020 due to the “commoditization” of data.

Experts suggest that for new entrants like Lebara or ntel to survive, they must transition from being “connectivity providers” to “digital service platforms,” integrating health, insurance, and streaming into their data bundles.

 

 

 

Critical Challenges

Despite the influx of new players, analysts said the Nigerian telecom market remains one of the toughest environments globally due to infrastructure vulnerability, macroeconomic volatility and regulatory burden.

The beginning of 2026 saw a shocking spike in infrastructure damage. In January 2026 alone, the NCC reported 41 major fibre cuts, mostly concentrated in Abuja due to uncoordinated construction activities. MTN Nigeria reported over 9,000 fibre cuts by the end of 2025.

“Nigeria cannot build a digital economy on fragile, vulnerable infrastructure. Every fibre cut is a hit to national security and economic productivity,” says industry analyst Joy Agwunobi.

Also, the devaluation of the Naira continues to inflate operating expenses (OPEX). Since most telecom equipment is imported, and tower maintenance relies heavily on diesel (though many are now transitioning to solar-hybrid systems), new entrants face a massive uphill battle to maintain “affordable” pricing while staying profitable.

Multiple taxation remains a “silent inflation driver.” Operators are often forced to pay various levies to federal, state, and local governments, alongside high Right-of-Way (RoW) fees. While some states have harmonized these costs, others still view telcos as “cash cows,” which directly inflates the end-user’s data price.

Muhili Adeagbo said the “novelty phase” of 5G is over. He said the focus has shifted to purpose-driven connectivity. For the new entrants to succeed where others failed, he said they must solve specific Nigerian problems.