Nigerian telecom operators to boost internet delivery with $1bn investment

The Nigerian Communications Commission (NCC) has announced that Nigerian telecom operators have ordered network infrastructure worth over $1bn from original equipment manufacturers in China.

The move has spelt a significant return to capital investment for the telecom sector after a long pause period due to financial constraints.

While revealing the update to industry leaders on Tuesday, the Executive Vice Chairman of the NCC, Aminu Maida, noted that Nigerian telecom operators are committed to strengthening their infrastructure investment and serving more than 165 million subscribers nationwide with an upgraded service. 

“Our operators have committed to investing over a billion dollars in telecom infrastructure this year. This is more than double the investment from last year. But this equipment needs to be manufactured. We went to China, and the original manufacturers have confirmed the orders,” the EVC told industry leaders in Lagos, who converged to update the Nigerian Communications Act 2023 to align with current technological trends.

The communications regulator explained that quality infrastructure is crucial to meeting the rising data demands, network shifts, and support for various digital services nationwide. The telecom sector is currently valued at over $75bn.

Also Read: Telecom: Nigeria now has nearly 170 million active phone subscribers – NCC.

This development comes months after the NCC approved a 50% telecom tariff increase to alleviate the sector from soaring operating costs, which operators say have risen by more than 300 per cent over the last decade.

Before the approval, telecom operators had warned that multiple taxations, forex pressures, economic fluctuations, increased inflation, and stagnant tariffs were hindering their investment capacity and resulting in poor network quality. 

They also noted that the absence of a tariff hike leaves the industry in a challenging situation of managing quality and expanding its network. They warned that failure to grant an immediate tariff adjustment may lead to operators resorting to service shedding – a situation where there is limited availability of telecom services in certain areas.

They also pledged to invest in network infrastructure within three months if the tariff adjustment was approved.

Network issues in Nigerian telecom

Recall that the Federal Competition and Consumer Protection Commission (FCCPC) recently called on telecom operators to address the issue of poor service delivery, exploitative practices, and potential consumer rights violations by telecom operators

It warned service providers like MTN, Glo, Airtel, and others to ensure improved service delivery to their customers amidst the recent 50 per cent telecom tariff hike. 

“Issues such as network congestion, dropped calls, inconsistent internet speeds, unusual data depletion, and poor customer service have remained prevalent concerns. It is, therefore, crucial that tariff adjustments directly translate into demonstrable and tangible service enhancements for consumers,” the commission said.

FCCPC also tasked the operators to allocate increased revenues responsibly, with an emphasis on infrastructure development and service delivery improvements. It noted that clear mechanisms must be established to monitor how these funds are utilised, ensuring that consumers directly benefit from the adjustments.

The clamour further proved a point earlier this week after MTN Nigeria reported a disruption in its network infrastructure that led to outcries by subscribers on poor service delivery.

“Service Restored: We sincerely apologise for the earlier disruption caused by simultaneous fibre cuts. All affected services have now been fully restored. Thank you for your continued understanding and support,” MTN said in an X post on Monday. 

As significant investment is required to maintain and expand telecoms infrastructure, the Minister of Communications and Digital Economy, Dr. Bosun Tijani, also emphasised the importance of both physical and soft infrastructure, including towers, fibre optic cables, data centres, and power solutions, as critical components for improving the service quality.

While defending the tariff hike in January, the minister revealed plans by the government to step in where private investment falls short, especially in underserved rural areas.

He noted that the government is working on creating special-purpose vehicles to develop infrastructure in these marginalised locations to ensure access to meaningful connectivity by more Nigerians. Tijani highlighted plans to increase foreign direct investment in the tech ecosystem from $1bn to $5bn annually by 2027. 

At that time, the federal government signed a $2,095,000 grant with the U.S. government 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 over the next five to six years.