By Juliet Umeh
Nigeria’s telecommunications sector is grappling with a steep rise in operational costs, as total operating expenditure (OPEX) surged to an unprecedented N5.85 trillion in 2024, according to the latest industry data released by the Nigerian Communications Commission, NCC.
The figure represents an 85 per cent jump from N3.16 trillion recorded in 2023. The NCC attributed the spike to inflation, foreign exchange volatility, energy costs, and high Right-of-Way (RoW) fees imposed by some state governments.
In its industry performance report, the Commission noted: “Most licensees complained of high Right-of-Way, RoW, fees, harsh macroeconomic conditions, and rising inflation. However, the Commission has been able to secure zero RoW fees in some states in 2024.”
The Right-of-Way, RoW, charge, a fee paid by telecom operators to lay fibre-optic cables across public spaces, remains a major bottleneck to broadband expansion in Nigeria. Despite federal approval of a uniform rate of N145 per linear metre in 2020, several states continue to impose higher charges.
Ogun State currently tops the list with N9,477 per linear metre, followed by Lagos (N6,264), Oyo (N5,303), Cross River (N4,737), Rivers (N4,047), Edo (N3,491), and Ondo (N3,075).
However, NCC’s Executive Vice Chairman, Dr. Aminu Maida, said engagement with state authorities was beginning to yield results.
“In the past year, five additional states — Adamawa, Bauchi, Enugu, Benue, and Zamfara — joined those that have eliminated RoW charges. This brings the total to 11 states now offering zero-cost RoW to accelerate broadband infrastructure deployment,” he revealed.
Despite these gains, industry analysts have expressed concern that Nigeria’s 70 per cent broadband penetration target by 2025 may no longer be attainable. As of September 2025, broadband penetration stood at 49.3 per cent, underscoring how high RoW costs continue to hinder infrastructure rollout.
Dr. Maida explained: “One of the most significant barriers to broadband deployment has been the high RoW fees charged by some states, despite the resolution by the Nigerian Governors’ Forum fixing the rate at N145 per linear metre. These elevated fees have delayed and, in some cases, reduced network expansion plans.”
Corroborating this, the Chairman of the Association of Licensed Telecommunications Operators of Nigeria, ALTON, Engr. Gbenga Adebayo, said unresolved policy issues were frustrating private investment.
“Multiple taxation, excessive RoW charges, and hidden levies imposed by some states are discouraging investment,” he lamented. “Even in states that claim to have waived the fees, operators still face backdoor charges in the form of education taxes and highway levies.”
Adebayo warned that unless the problem is addressed, Nigeria’s broadband and digital inclusion goals will remain out of reach.
“We need stronger policy enforcement to harmonise rates nationwide. Without affordable access for operators, the cost burden will continue to trickle down to consumers,” he stressed.
The NCC report further revealed that operators’ capital expenditure, CAPEX, rose by 159 per cent year-on-year, climbing from N1.12 trillion in 2023 to N2.9 trillion in 2024, largely due to inflation and exchange rate unification, which inflated the cost of imported network equipment.
According to the report, telcos invested heavily in network modernisation, fibre expansion, and 5G rollout, despite the harsh economic environment. The Commission noted that the new CAPEX figures reflected “not only new infrastructure builds but also the increased cost of maintaining competitive service quality.”
Despite soaring expenses, the sector still recorded 44.7 percent revenue growth, with total income rising from N5.30 trillion in 2023 to N7.67 trillion in 2024, driven by increased data consumption, subscription growth, and enterprise service expansion.
A telecom industry source told MedTech Insider that the tariff adjustment approved by the NCC earlier in the year helped operators regain some financial stability.
“The tariff review provided some relief for operators, helping major players like MTN return to profitability after several quarters of pressure,” the source said.
Dr. Maida reaffirmed the Commission’s commitment to reducing the cost of doing business in the telecom industry.
“Affordable and harmonised RoW charges are critical to our broadband and digital economy goals. The Commission remains committed to ensuring that Nigeria achieves sustainable connectivity growth for all citizens,” he stated.
