Telcos Boost Investments to Keep Pace with Soaring Data Demand

Nigeria’s telecommunications industry is experiencing remarkable expansion, fueled by a significant rise in data demand. The Nigerian Communications Commission (NCC) has reported an astonishing 93.35% increase in monthly internet usage, achieving a record high of 1,000,930.6 terabytes (TB) in January 2025.

This increase in data consumption is largely due to the widespread embrace of digital services, especially streaming and social media platforms. Karl Toriola, the CEO of MTN Nigeria, emphasized that “social media and streaming content have been pivotal in driving data consumption.”

In light of this growth, major telecom operators such as MTN Nigeria and Airtel Africa have substantially raised their core capital expenditures to enhance network capacity and address the rising demand for data services.

In the fourth quarter (Q4) of 2024, MTN Nigeria experienced a 42.9% increase in data traffic, with average data usage per subscriber climbing by 33.6% to 11.2GB. Similarly, Airtel Africa reported a 37.2% rise in average data usage per customer, reaching 8.4 GB per month.

To support this growth, telecom companies have ramped up their capital expenditure (capex). MTN Nigeria’s capex spending surged by 34.6% to N634.7 billion in 2024, while Airtel Africa’s capex increased by 21.4% to $1.04 billion.

The heightened investment in network infrastructure is anticipated to enhance service quality and accommodate the increasing demand for data services. A report from the Global System for Mobile Communications Association (GSMA) forecasts that Nigeria’s mobile market will expand to 144 million subscribers by 2025, with data usage expected to grow by 50% annually

NCC’s Response

The Nigerian Communications Commission (NCC) has sanctioned a 50% increase in data tariffs, marking the first adjustment since 2013. This decision aims to facilitate telecom operators in enhancing their infrastructure and fostering innovation. It is anticipated that this increase will lead to improvements in network quality, customer service, and overall coverage. Telecom operators have faced challenges in maintaining profitability due to escalating costs and currency depreciation.

The NCC has set a three-month timeframe for operators to enhance network quality, warning of potential repercussions for non-compliance. Karl Toriola, the CEO of MTN Nigeria, expressed confidence that the tariff increase will generate additional revenue for telecom companies to reinvest in their networks. He stated, “Our projections indicate that there will be increased cash flow, which will provide further funding for expansion, quality service, redundancy, and an enhanced customer experience.”

Similarly, Dinesh Balsingh, CEO of Airtel Nigeria, shared his agreement, noting that the tariff adjustment will empower the company to persist in its investments in network infrastructure, broaden coverage, and offer improved products and services.

Nigeria’s telecommunications industry is witnessing substantial expansion, fueled by a rising demand for data services. The recent increase in data tariffs, despite being met with consumer discontent, is anticipated to enhance revenue for telecom operators, allowing for greater investment in infrastructure and innovation. Furthermore, the depreciation of the naira, which has rendered Nigeria’s exports more competitive, offers an optimistic perspective for the nation’s economy.