Nigerian telecom sector secures over $1 billion in investments after tariff hike

By Mofeoluwa Awe

Nigeria’s telecommunications industry has attracted more than $1 billion in new infrastructure investment following the Nigerian Communications Commission’s (NCC) approval of a 50 percent tariff increase in January.

NCC Executive Vice Chairman, Aminu Maida, confirmed that major operators such as MTN, Airtel, and Globacom are now upgrading their networks, importing equipment, and building new towers at an unprecedented pace.

Maida explained that the tariff adjustment restores the market dynamics that initially powered Nigeria’s telecom boom in the early 2000s. He stressed that cost-reflective pricing is vital for sustaining investment and meeting the fast-growing demand for data.

“The simple act of endorsing the increase has facilitated investment,” Maida said during a media conference. “This year, we are seeing investment of over one billion dollars in essential infrastructure. This did not occur in 2022, 2023, or 2024.”

A Sector at a Breaking Point

The 50 percent tariff increase triggered widespread debate, but the NCC insisted it was both necessary and unavoidable. For the past decade, the sector operated under regulated prices, which restricted operators while their partners, including tower companies and fibre providers, routinely adjusted contracts each year to reflect inflation and exchange rate fluctuations. This imbalance caused a steep drop in investments.

“Operators found themselves constrained by fixed tariffs, whereas other stakeholders in the value chain adapted their contracts on an annual basis to account for inflation and foreign exchange fluctuations,” Maida noted. “The increase in tariffs has restored balance and released the capital the industry requires.”

Major Players Step Up Investments

The impact is already visible. MTN Nigeria, the country’s largest telecom operator, invested N565.7 billion (about $377.1 million) in the first half of 2025, representing a year-on-year increase of 288.4 percent. This investment accelerated 4G rollout, expanded fibre coverage, and initiated the construction of a new Tier 3 data centre.

Airtel Nigeria also increased its capital spending, directing $39 million in Q2 2025 towards strengthening mobile and broadband networks. The company further announced a $120 million investment in a 38-megawatt hyperscale data centre in Lagos, scheduled to open in 2026.

The renewed investment cycle has also re-engaged players who had stalled operations. According to Maida, a local operator that had not purchased new equipment for three years has resumed upgrades.

A Fragile but Hopeful Outlook

Maida cautioned that unlocking capital is only the first step. Turning that investment into better service requires time, careful planning, and efficient management of complex processes such as equipment procurement, importation, and installation. He further highlighted the industry’s heavy reliance on foreign hardware and software, as well as the high monthly diesel consumption required to power telecom networks.

The tariff adjustment marks a return to stable, market-oriented policies, which Maida argued are essential to attract and retain foreign investment. He concluded with a clear message: “For service to improve, investment must take place. For investment to occur, operators must have a fair opportunity to recover their costs. This is the outcome that the tariff adjustment has produced.”