Nigeria telecoms sector to witness 1.4% decline in average revenue by 2028 – report

A February 2025 Global Telecom Outlook (2024-2028) report by PwC. has revealed that the Nigerian telecom industry is projected to experience a 1.4 per cent decline in the average revenue per user (ARPU) by 2028. The fixed-line ARPU measure, a key tool driving growth in the telecom industry, was projected to decline between 2023 to 2028. 

This was not far-fetched from the latest report which saw the ARPU plunge by 40.87 per cent to $1.85 in Q3 2024 from $3.12 in the same period in 2023. The plunge was attributed to the profound effects of the naira’s devaluation on the sector which reduced subscribers purchasing power.  

In the month ending the quarter – September 2024, the Nigerian telecom industry witnessed a 2.88 per cent drop in its subscriber base to 154.9 million from 159.5 million in August 2024. This was the sole reduction in almost a year. 

The sector also witnessed a consecutive drop in subscribers from March 2024 (219.3 million) up till September 2024. The drop was attributed to the mass deactivation of over 42 million SIM cards in February 2024 and the sector’s rebasing in September 2024. 

Q3 2024 financial reports from MTN Nigeria and Airtel Nigeria revealed significant declines in ARPU, with MTN dropping to $2.09 (from $3.24) and Airtel to $1.60 (from $3). 

For telecom operators, the projected drop translates to reduced revenue making it challenging for them to invest in infrastructure and maintain profitability. A declining ARPU also means that Nigerian telecom operators may need to compete more aggressively for customers, which could lead to further price reductions and decreased profitability.

The report also comes as a hit to Nigerian mobile operators who have struggled in the past few months amidst economic decline, inflationary winds, and naira devaluation. To manage this projection, the likes of MTN, Airtel, Globacom, and 9mobile will seek to leverage the recent 50 per cent tariff increase to improve their revenue status.

Subscriber growth 

On another positive outlook, the PwC report noted that Nigerian telecom subscribers are expected to rise at a compound annual growth rate (CAGR) of 9.8 per cent between 2023 and 2028. Driven by this, the Nigerian telecom sector is expected to maintain an 8 per cent CAGR between 2023 and 2028, making it one of the fastest-growing telecoms markets globally.

This isn’t far-fetched as recent NCC data reported by Technext showed that the telecom sector has witnessed a 2.66 per cent surge in active subscriptions with 169.3 million subscribers in January 2025 from the 164.9 million recorded in December 2024. 

On the bank of this, there has been a consecutive increase over the past 5 months, starting from September 2024 (154.9 million), October 2024 (157.9 million), November 2024 (159.8 million), December 2024 (164.9 million) to 169.3 million in January 2025.

The report also stated that Nigeria’s telecom sector has shown remarkable progress, with mobile service revenue hitting $7.6 billion in 2024. 

Also Read: Telecom subscribers grew by 2.66% to 169.3 million as Nigerians used 1 million terabytes of data in Jan 2025.

Broadband connection

Fixed broadband subscriptions in Nigeria are projected to grow by 9.2 per cent annually through 2028, placing it among the world’s top performers alongside India (17.2 per cent) and Malaysia (9 per cent). 

Recall that Nigeria’s broadband penetration rate rose significantly from 44.43 per cent in December to 45.61 per cent in January 2025. The data comes amidst a positive increasing trend from September 2024. 

The growth in key markets like Nigeria signals strong demand for connectivity and digital services, particularly in regions with expanding infrastructure investments. This comes amidst effort by the Nigerian government to strengthen broadband connection across the country.  

In ensuring every Nigerian is connected irrespective of their location, the Federal Government of Nigeria recently planned to invest $2 billion in 90,000 kilometres of submarine cable network across the country. 

Also in January, the United States government awarded Nigeria a $2,095,000 grant to help boost the country’s digital infrastructure. The grant will be invested in deploying 90,000 kilometres of new fibre optic backbone infrastructure across Nigeria.

Nigeria also hosted the World Submarine Cable Summit discussion on how to protect submarine cables and prevent frequent cuts and damage to deep seas. It featured 50 countries including about 250 experts from governments and the private sector, the biggest submarine cable layers, different vendors, academia, and other relevant stakeholders.

Africa’s outlook 

The report heat map for telecom global growth projection showed that telecom revenue will increase substantially in developing regions such as Africa with close mention of countries like Nigeria, South Africa Kenya, and Egypt. 

In fixed telecoms, most countries were grouped around the 0 to 6 per cent CAGR range, including the U.S. and China. But a few outliers show much higher growth for most African countries and India falls between 7 and 10 per cent, while mature markets such as Japan and Switzerland exhibit negative CAGRs. 

Another Statista report backed the trend that the number of smartphone users in Africa was forecast to continuously increase between 2024 and 2029 by 353.1 million users (109.45 per cent). After the eighteenth consecutive year, the smartphone user base is estimated to reach 675.71 million users and therefore a new peak in 2029.

Also, mobile internet users would reach 675.71 million by 2029 from 400.72 million in 2025. As more people access the internet through their mobile devices, African telecom operators can expect an increase in data revenue which fuels all-round revenue. 

Global projection

Revenue: The global telecommunications industry is projected to generate $1.3 trillion in total revenue by 2028, despite facing sluggish growth and pricing challenges as total service revenue across fixed and mobile networks increased by 4.3 per cent in 2023 to $1.14 trillion.

It stated that the industry is facing a fundamental challenge such as the increasing commoditization of its core products and services. This has made it difficult for telecom companies to raise prices, even as they continue to invest heavily in infrastructure.

Amidst these obstacles, the industry still holds opportunities for growth as the report projects that by 2028, the global telecom sector will see an additional $200 billion in incremental revenue growth.

5G: The network, which began rollout in 2019, will account for nearly two-thirds of mobile subscriptions by 2028. Most notably, 5G is expected to take over 4G as the dominant mobile standard globally from 2026. 4G and others are expected to witness a continued drop from 2024 to 2028. 

Subscriptions to the network will more than quadruple from 1.79 billion in 2023 to 7.51 billion in 2028, with its share of total mobile subscriptions more than triple, rising from 18.8 per cent in 2023 to 64.1 per cent in 2028.

AI emergence: The report projects the use of powerful Artificial Intelligence (AI) tools, especially the Gen AI. PwC cited AT&T, an American multinational telecom holding company, whose generative AI platform has reduced software development time by around 10 to 30 per cent while also saving customer service agents several minutes per call. 

An Indian enterprise network provider is also developing a cognitive network operations center (NOC) powered by AI. The cognitive NOC leverages AI as a smart copilot that guides the NOC engineers in their day-to-day work. It applies automation to provide intelligence at scale and build self-healing network capabilities. 

“Deploying AI effectively (in telecom) can help take cost and friction out of the B2C business, protect margins, and improve the customer experience through AI-enabled personalization at scale, while also rapidly becoming the industry norm in network management,” the report reads.