Nigeria’s telecommunications sector is facing a severe financial crisis, with total operating costs (OPEX) soaring to an unprecedented ₦5.85 trillion in 2024, according to a stunning new report from the Nigerian Communications Commission (NCC). This figure represents a staggering 85% increase from the ₦3.16 trillion recorded in 2023, laying bare the extreme economic pressures threatening the industry’s stability and its ability to deliver on national digital economy goals.
Industry leaders and regulators point to a perfect storm of macroeconomic headwinds: persistent inflation, crippling foreign exchange volatility, and soaring energy costs. However, one challenge stands above the rest as the most significant, man-made barrier to progress: the unresolved and chaotic Right-of-Way (RoW) fee crisis.
This surge in operational expenditure is now casting a dark shadow over the ambitious targets of the Nigerian National Broadband Plan (NNBP 2020-2025), which aims to achieve 70% broadband penetration by the end of next year. With penetration currently hovering at just 49.3% as of September 2025, industry experts warn that the goal is now in serious jeopardy.
The ₦5.85 Trillion Squeeze
The NCC’s 2024 industry report paints a grim picture of a sector being squeezed from all sides. While total industry revenue grew by a respectable 44.7% to ₦7.67 trillion, this growth was almost entirely consumed by escalating costs.
Beyond the ₦5.85 trillion in operating expenses, capital expenditure (CAPEX) the critical investment in new infrastructure like 5G towers and fibre optic cables also skyrocketed to ₦2.9 trillion. This 159% year-on-year jump was largely attributed to the unification of the exchange rate, which made importing necessary network equipment exponentially more expensive.
“The industry is in a precarious position,” said Engr. Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON). “While revenue is growing, our costs of OPEX and CAPEX are growing much faster. Operators are being forced to absorb costs related to energy, security, and multiple taxation, but the most frustrating of all are the arbitrary Right-of-Way charges that hinder the one thing we all need: broadband expansion.”
The financial strain became so acute that in January 2025, the NCC approved a 50% tariff increase for voice and data services. While this measure helped operators return to profitability after record losses, it came at a high cost. NCC data from the first half of 2025 revealed that Nigeria lost over one million internet subscribers, as rising costs of living and higher tariffs pushed digital access out of reach for many.
The RoW Battleground: A Nation Divided
At the heart of the crisis is the Right-of-Way (RoW) dispute, a long-standing battle between telcos and state governments. RoW fees are levies paid by operators to state governments for the permit to lay fibre optic cables, the essential backbone for all high-speed internet.
In 2020, the Nigerian Governors’ Forum (NGF), in collaboration with the Federal Ministry of Communications and Digital Economy, agreed to a harmonized national cap of ₦145 per linear meter to spur infrastructure development.
However, the NCC report and ALTON data reveal that many states have flagrantly ignored this agreement, opting instead to use RoW permits as a primary revenue generator. This has created a “tale of two Nigerias,” where digital progress is directly tied to the whims of state-level administration.
A list of states charging exorbitant fees has been cited by operators as the primary roadblock to laying the thousands of kilometers of fibre needed to meet the NNBP targets. The fee disparity is stark:
- Ogun State: Charges the highest rate at ₦9,477 per linear meter.
- Lagos State: ₦6,264 per linear meter.
- Oyo State: ₦5,303 per linear meter.
- Cross River State: ₦4,737 per linear meter.
- Rivers State: ₦4,047 per linear meter.
- Edo State: ₦3,491 per linear meter.
- Ondo State: ₦3,075 per linear meter.
The “Digital Enablers”: 11 States Waive Fees
In stark contrast, the NCC has lauded 11 “digital-enabler” states that have completely waived RoW fees, recognizing that the long-term economic benefits of connectivity far outweigh the short-term gains from levies.
These states include: Anambra, Katsina, Kebbi, Nasarawa, Osun, Plateau, Adamawa, Bauchi, Enugu, Benue, and Zamfara.
Dr. Aminu Maida, the Executive Vice Chairman of the NCC, has been on a nationwide campaign, urging governors to see the bigger picture.
“One of the most significant barriers to broadband deployment has been the high RoW fees charged by some states,” Dr. Maida stated at a recent stakeholder forum. “We commend the 11 states that have adopted a zero-fee policy. Their leadership is attracting network investment and accelerating broadband rollout. We are intensifying our advocacy to get all 36 states to adopt this 100% waiver, as it is a critical prerequisite for achieving our national digital economy vision.”
Industry analysts note that a further 17 states have adhered to the ₦145 cap, leaving a defiant minority of eight states and the FCT holding the entire nation’s broadband ambitions hostage.
A Compounding Crisis and a Bleak Outlook
The RoW issue does not exist in a vacuum. It compounds other critical infrastructure challenges. Dr. Maida recently revealed that between January and August 2025 alone, the industry recorded over 19,300 incidents of fibre cuts and 3,240 cases of equipment theft and vandalism.
Operators are thus fighting a war on three fronts: they are paying exorbitant fees to deploy infrastructure, battling a harsh economy to power it, and struggling with incessant sabotage that disrupts service.
With the 2025 deadline for the National Broadband Plan looming, the 70% penetration target looks increasingly like a fantasy. The ₦5.85 trillion operating cost is a clear distress signal. Experts agree that unless the Federal Government can enforce the harmonized RoW policy and protect critical national infrastructure, Nigeria’s digital divide will only widen, leaving its economy and its citizens disconnected from the future.
