GAINS, PAINS OF THE TELECOM SECTOR

The industry’s gains are at the expense of service quality and consumer welfare, contends ELVIS EROMOSELE

In 2025, Nigeria’s telecommunications sector finds itself at a defining moment. Once celebrated as one of the country’s most successful liberalisation stories, the industry now sits between resilience and public discontent.

While operators are recording higher revenues and data usage continues to grow, consumers are increasingly frustrated by rising costs, inconsistent service quality and controversial billing practices. The story of Nigeria’s telecom sector in 2025 is therefore one of gains, pains, and an urgent need for a clearer path forward.

Despite economic headwinds, inflation, naira depreciation and rising operational costs, the telecom industry has remained one of Nigeria’s most resilient sectors.

Data consumption continues to surge. Even after a significant upward review of tariffs in early 2025, Nigerians did not reduce their reliance on mobile internet. On the contrary, data usage recorded double-digit growth within months, underlining how deeply connectivity has become embedded in daily life, from business and banking to education, entertainment and social interaction.

Operators also benefited financially from the long-overdue tariff adjustment. For more than a decade, telecom prices remained largely static while costs soared. The 2025 tariff increase improved cash flows and strengthened the balance sheets of major players, enabling them to better absorb forex pressures and rising energy expenses. Industry analysts estimate that data services alone could generate trillions of naira in revenue this year.

In addition, Nigeria’s teledensity remains strong, and mobile broadband penetration continues to expand, reinforcing telecoms as a critical pillar of the digital economy and a major contributor to GDP.

While operators speak of sustainability, many subscribers feel the burden has shifted squarely onto them.

The 2025 tariff hike, affecting voice, data and SMS, sparked widespread backlash. For millions of Nigerians whose incomes have not kept pace with inflation, the cost of staying connected has become increasingly painful. Students, small businesses and low-income earners are particularly affected, as connectivity is no longer a luxury but a necessity.

More troubling for consumers is that higher prices have not translated into better service. Complaints about slow internet speeds, frequent network outages, dropped calls, and inconsistent coverage remain common across major networks. In many areas, especially outside urban centres, service quality remains unreliable.

Infrastructure challenges play a major role. Frequent fibre cuts, vandalism of base stations, power shortages and high diesel costs continue to undermine network performance. Operators spend billions annually repairing damaged infrastructure, costs that ultimately find their way back to subscribers.

This disconnect between price and performance has eroded trust. Many users now question whether the industry’s gains are coming at the expense of service quality and consumer welfare.

Another flashpoint in 2025 has been the controversy surrounding USSD services, which are widely used for mobile banking and financial transactions.

Under a new billing model, telecom operators now charge subscribers directly for USSD sessions, rather than billing banks. While the move brought clarity and ended years of opaque deductions, it also introduced new costs for users, particularly those who rely heavily on USSD for daily transactions.

For low-income Nigerians and those without smartphones or mobile apps, USSD remains the most accessible gateway to financial services. Even modest per-session charges can quickly add up, raising concerns about financial inclusion and affordability.

The USSD debate highlights a recurring theme in Nigeria’s telecom space: reforms that make business sense but risk alienating the very consumers the sector depends on.

For Nigeria’s telecom sector to thrive sustainably beyond 2025, several issues must be addressed decisively.

First, service quality must improve. The Nigerian Communications Commission (NCC) must enforce stricter quality-of-service benchmarks and ensure that tariff increases are matched by measurable network improvements. The NCC has barked enough; it must now show that it can bite. Consumers deserve value for money.

Second, infrastructure protection should be treated as a national priority. Telecom assets are critical infrastructure and should be safeguarded accordingly. Reducing vandalism and fibre damage would significantly improve service reliability and reduce costs.

Third, regulatory and operating costs need reform. High right-of-way charges, multiple taxation and inconsistent state-level policies continue to inflate operating expenses. Harmonising these costs would ease pressure on operators and, in the long run, subscribers.

Fourth, affordability and inclusion must remain central. Targeted data plans for students, small businesses and rural communities can help ensure that higher tariffs do not deepen the digital divide.

Finally, consumer engagement and transparency are key. Clear billing, responsive customer service and honest communication will go a long way in rebuilding trust between operators and subscribers.

In 2025, Nigeria’s telecom sector stands strong but strained. It is profitable, indispensable and deeply woven into the fabric of national life, yet increasingly criticised by the people it serves.

The challenge ahead is not just growth, but balanced growth, one that aligns commercial sustainability with service quality, affordability and inclusion. If regulators and operators get this balance right, telecoms will remain a powerful engine of Nigeria’s digital future. If not, public frustration may continue to overshadow the sector’s undeniable gains.

Eromosele, a corporate communications expert and sustainability advocate, wrote via: elviseroms@gmail.com