After 11 years of stalled tariff adjustments, Nigeria’s telecom sector has suffered $11.3 billion in projected revenue losses, forcing major players like MTN Nigeria and Airtel Nigeria to the brink of financial crisis. A recent in-house report by MTN Nigeria, obtained by TechCabal, reveals that the delay, coupled with severe naira devaluation, has crippled telecom operators’ ability to sustain operations and invest in network infrastructure.
A Sector in Crisis
Industry leaders, including MTN Nigeria’s CEO Karl Toriola and Airtel Nigeria’s CEO Dinesh Balsingh, have repeatedly warned that without a tariff adjustment, the sector’s survival was at risk.
“The price increase, which was highly needed for the survival and continued growth of the industry, will enable us to continue investing in network infrastructure, expanding coverage, and delivering improved products and services that meet the evolving needs of our customers,” Balsingh stated.
As the naira collapsed to ₦900 per dollar in 2023, telecom operators—heavily reliant on imported equipment—were forced to operate at unsustainable costs. MTN Nigeria reported a ₦137 billion loss in 2023, its first since going public in 2019, while Airtel Africa posted a post-tax loss of $89 million for the financial year ending March 31, 2024.
“We were borrowing at 120% to fund our operations, which was unsustainable,” said Toriola, highlighting the mounting financial distress.
MTN Nigeria’s dividends dropped from ₦530 billion in 2022 to ₦196.67 billion in 2023, reflecting the sector’s deepening struggles.
Impact on Government Revenue
The tariff delay also dealt a major blow to government tax revenue. Despite telecom operators contributing ₦428 billion in 2024, tax revenues from the sector are projected to plummet by 92% to just ₦29 billion in 2025—a sharp decline that will severely impact public finances.
A Long-Overdue Tariff Adjustment
Telecom operators had originally requested a 40% tariff increase in 2022, but as financial pressures mounted, a 100% hike became necessary. The tariff increase was finally approved on January 20, 2025, offering a potential turnaround for the struggling industry.
With new tariffs in place, the sector’s revenue is expected to rebound to $6.67 billion in 2025 and $8.33 billion in 2026. However, experts caution that the damage from the 11-year delay may be irreversible, with long-term consequences for the Nigerian economy and telecom infrastructure development.
What’s Next?
While the new tariffs provide a lifeline, telecom operators must still navigate the challenges of forex volatility, rising operational costs, and regulatory unpredictability. The coming years will determine whether the industry can fully recover—or if the scars of this crisis will remain permanent.
