What can $1bn projected investment do for telecom sector?

The Nigerian telecommunications sector recorded $80.78 million in foreign direct investments (FDIs) in the first quarter of 2025 and over $1billion worth of investments will be recorded in the sector by December, according to the Nigerian Communications Commission (NCC).   NCC had announced that telecom operators in the country would invest more than $1 billion in […]

The Nigerian telecommunications sector recorded $80.78 million in foreign direct investments (FDIs) in the first quarter of 2025 and over $1billion worth of investments will be recorded in the sector by December, according to the Nigerian Communications Commission (NCC).  

NCC had announced that telecom operators in the country would invest more than $1 billion in expanding and upgrading their networks before the end of 2025. The Commission said this investment is a direct result of recent regulatory reforms and tariff adjustments that have made the telecom industry more attractive to local and foreign investors.

The telecom regulator explained that the money would go into building more towers, expanding broadband internet, upgrading existing infrastructure, and extending services to rural communities where access is still poor.

According to the regulator, these changes will mean faster internet, better call quality, and wider access for millions of Nigerians who depend on mobile phones for their daily activities.

In the past few years, Daily Trust reports that telecom companies have struggled with high operating costs, unstable power supply, and difficulties accessing foreign exchange for equipment purchases. These challenges made it difficult for operators to expand their networks at the speed Nigeria’s fast-growing population demands.

To address this, the NCC introduced new reforms, including tariff adjustments, better spectrum allocation, and an improved licensing system. These reforms have now given operators the confidence to bring in fresh investments.

 

Telcos speak of investment surge  

The telecommunications operators have admitted that the sector in Nigeria is once again on a strong growth trajectory after three years of near zero investment due to harsh economic policies. 

Operators are now optimising networks, building new sites to meet rising capacity demands, upgrading existing infrastructure, and migrating more sites from old radio links to high-speed fibre connections, Chairman of Association of Telecommunications Operators of Nigeria (ALTON), Engr Gbenga Adebayo said. 

Engr. Adebayo, who is the official spokesman for all the telcos, also highlighted ongoing capacity development within the sector.

“We are training and retraining our workforce to adapt to emerging technologies. The Nigerian Communications Commission (NCC) has set strict service level requirements, and we are committed to not only meeting but surpassing them. Though network optimisation may occasionally cause service disruptions, we appeal to the public for understanding as these efforts will ultimately deliver a much-improved user experience nationwide.”

 

 New telecom companies trooping to Nigeria 

The surge in investments in the sector is attracting more foreign and local investors into the country. Just recently, an India-based telecom infrastructure company, Indus Towers Limited, announced that it is setting up its factory in Nigeria soon.

Announcing after a meeting held in India, the telecom infrastructure company said its board of directors had reviewed and deliberated on strategic opportunities to expand the Company’s footprint across select international markets, including Nigeria.  

“Recognizing the growth potential in emerging geographies, the Board has approved the Company’s foray into African markets, beginning with Nigeria, Uganda, and Zambia. These markets offer attractive prospects for revenue diversification, operational scalability, and long-term value creation. The Company will leverage its robust financial position and anchor customer relationship with Bharti Airtel to establish a strong and competitive presence in these regions. As part of its broader growth strategy, the Company will continue to evaluate expansion opportunities in other African markets where Airtel has an established presence”, Indus said. 

Similarly, Knot Solutions, a digital transformation company, is coming into the company though via a partnership with T2. Following an earlier network upgrade agreement with Huawei, T2 and Knot Solutions, a leading digital transformation company based in India, signed a multi-million-dollar strategic partnership last week. 

The partnership aims to modernize T2’s Business Support Systems (BSS) and Operations Support Systems (OSS), driving T2’s mission to become Nigeria’s Digital Lifestyle Partner and ushering in a digital renaissance in telecom.

MTN is investing N1trn to improve service quality in 2025

Karl Toriola, the chief executive officer (CEO) of MTN Nigeria, says the company will invest about N1 trillion to improve network quality and expand service capacity across the country in 2025.

Speaking to journalists about the state of the industry, Toriola said the spending reflects MTN’s commitment to enhancing customer experience despite facing severe macroeconomic headwinds last year.

“In the course of 2025, we are investing about a trillion naira in capital expenditure to improve quality of service. Independent benchmarks like speed tests and crowdsourced data confirm the progress, even if the public may not always feel it.

“We outspent our competitor nine to one on capacity and quality, and over time, customers naturally migrate more of their spend to the better provider.”

 

Airtel highlights key network initiatives 

Airtel Nigeria announced that its recently doubled investments will directly accelerate critical network initiatives including nationwide coverage expansion, capacity augmentation through spectrum acquisition, fibre rollout, and satellite partnerships with Starlink and OneWeb. 

Chief Technology Officer, Harmanpreet Dhillon, disclosed these initiatives during a television interview where he reaffirmed Airtel’s commitment to building a more resilient and inclusive digital infrastructure for Nigeria.

“Airtel’s priority is nationwide coverage, complemented by robust capacity augmentation through additional radios on 2G and 4G, alongside upgrades to 5G,” Dhillon said. “We are equally investing in strengthening our fibre backbone and, through partnerships with Starlink and OneWeb, extending dependable connectivity to even the most remote communities across Nigeria.”

‘Stable policies, heavy capital inflow needed to sustain steady growth’

Speaking further on challenges faced from last year, Toriola said the telecoms sector requires heavy capital inflows to sustain growth, citing investments in fibre rollout, data centres, and network expansion as examples.

“In 2024, we were making a loss and cash-flow negative. We had to borrow to keep the lights on as the naira moved from N450 (per dollar) to N1,600 (per dollar). Our costs went up fourfold, yet we were unable to adjust tariffs until early 2025,” he said.

Toriola added that for Nigeria to remain attractive to investors, operators must be allowed to pass on some inflationary costs to customers.

Despite the improvements, Toriola emphasised the need for a stable regulatory environment, clear rules, and unhindered access to foreign exchange for operators to continue making returns.

He said Nigeria must continue to attract billions of dollars in investment to expand digital infrastructure, including fibre rollout and data centres.

“Capital doesn’t care whether you are Nigerian or foreign — it goes where it gets the safest and best returns. To attract that capital, we need professional operators and, more importantly, an enabling environment that gives investors confidence about security, stability, and repatriation of returns,” he said.

The MTN boss noted that reforms in the foreign exchange market have eased access to dollars, making it easier for operators to move funds in and out of the country.

However, he warned that without mechanisms to adjust prices in line with inflation and currency shocks, the industry risks collapse.

 

Surge in investments to create more direct and indirect jobs – Experts 

Makinwa Adetoro, a senior Business Development manager for West, Central, and Southern Africa at Baicells Technologies Co. Ltd, said the contribution of the telecommunications sector is very obvious to everyone in recent years.

 

 

 

There are lots of services online now, from e-commerce, digital banking and government services. 

 

 

 

“All these are made possible by the telecommunications sector; so, we can say telecommunication has contributed greatly in recent years. From the Q4 2024 report by the Statistician General of the Federation, the telecommunications sector was highlighted as one of the major contributors of economic activities to the country’s Gross Domestic Product (GDP) with 13.94% in the quarter 3 of 2024”, he said. 

 

 

 

He said from the contribution of the telecom sector to GDP, “we can see the telecom ecosystem contribution; we can see a lot of agencies, banks, PoS operators who rely solely on telecom services for their daily operation, and a lot of businesses have transitioned from physical offices to online services because of available and reliable telecom services. On a big scale, we now have many data centres in Nigeria where Nigerians are employed both in construction, operation and maintenance of these infrastructures; they were not there years ago. We are still hoping to have more investment in this sector which will create more direct and indirect employments.”

 

 

 

 

 

Factors militating against investments in Nigerian telecom sector 

 

 

 

According to the Association of Licensed Telecommunications Companies of Nigeria (ALTON), the issue of multiple taxation and high cost of Right of Way are still major problems that need to be addressed to encourage more investments in the telecom sector.

 

 

 

“We may not see a steady growth in investments until the industry challenges are addressed. Issues of Right of Way charges are still there, likewise multiple taxation,” ALTON said in a recent statement.

 

 

 

The CEO of Digital Reality and immediate past President of the Association of Telecommunications Companies of Nigeria (ATCON) Engr. Ikechukwu Nnamani said he expected the government would make the industry attractive by creating a very conducive and stable environment.

 

 

 

According to him, a stable environment would mean that the government is consistent with its policies. Nnamani also observed that instability in the country’s forex market had been a major discouragement for many foreign investors who are interested in the country’s telecoms.

 

 

 

However, he expressed optimism that with the recent relative stability in the forex market, things may begin to improve in subsequent quarters of the year.

 

 

 

For Chukwuemeka Fred Agbata one of the biggest hurdles to broadband expansion has been the prohibitive cost of Right of Way (RoW) charges: the fees telecom operators must pay to lay fibre-optic cables across state-owned land, which drastically slows down digital infrastructure rollout. He called on state governments to eliminate RoW to sustain the telecom industry’s increased investment.