With an average data cost of $0.38 for a gigabyte, mobile data in Nigeria is one of the cheapest in the world and one of the lowest in Africa, according to a report by the Global System for Mobile Communications Association (GSMA).
The report, “The Role of Mobile Technology in Driving the Digital Economy in Nigeria”, addresses the challenges hindering the growth and development of the telecommunications industry and the crucial role of the mobile sector in Nigeria’s economic development.
“According to the ITU, the cost in Nigeria (as a % of GNI per capita) for a basic data-only package is the lowest in West Africa and well below the average across Africa,” the GSMA report stated.
In comparison to Nigeria, other African countries, such as Kenya, Ethiopia and South Africa have higher data costs, with Kenya averaging $0.59 per gigabyte, Ethiopia with an average of $0.68 per gigabyte and South Africa at $1.77 per gigabyte.
Notably, the United States of America offers data rates at an average of $6 for a gigabyte.
Amid its cost-friendly and competitive data rates, Nigerian telecommunications operators are currently advocating a tariff increase, to address the pressing challenges the sector is faced with, due to currency devaluation, inflation and the overall Nigerian economic downturn in the past months.
MTN Nigeria’s Chief Executive Officer, Dr Karl Toriola, during a recent interview with Channels TV, highlighted the diverse challenges the Nigerian telecommunications industry had to scale through in the past year due to the state of the Nigerian economy, emphasizing the need for tariff adjustments to ensure the sustainability of the sector.
“2024 was a very torrid year for the entire telecoms industry. We are the largest operators, so we were probably able to be a bit more resilient but it’s been very difficult,” he said.
Dr Toriola cited the major factors that contributed to the challenges of telecom operations in 2024, noting that the cost of operations of the telecoms firm now exceeds its revenue.
“The difficulty was triggered by the currency devaluation and inflation which happened on a very rapid scale. What this has done is that it has driven the cost of operations up so significantly, that by the end of the year, we are spending more to keep operations up and running than we are generating in revenue and that is not sustainable,” Toriola said.
He noted that the tariff increase will enable telecom operators to build the capacity needed to provide quality services.
“What the tariff adjustment allows us to do is to continue to reinvest, because we need to build capacity, build resilience, put in additional generators and alternative power supply systems for stable and high-quality networks,” Toriola said.
More importantly, he emphasized that the operations of telecom operators are threatened due to present challenges and that tariff adjustments are needed for the sector to survive.
“If you have any organization that’s spending 160% of what it earns in revenue, at some point that organization is going to shut down. We are running on fumes to keep our networks up, and we are keeping our networks up. We are not shutting down any networks at this point, because we believe that sooner or later, the sustainability issue will be addressed,” he stated.
The Federal Government has acknowledged the need for tariff adjustments, while also assuring Nigerians that any increase will be moderate, and not up to 100% as the telcos had requested.
Speaking on the tariff increase in a recent stakeholders’ meeting with Mobile Network Operators, Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, said: “We want to strike a balance as a government, to protect our people, but also protect and ensure that these companies can continue to invest significantly”.
As discussions concerning the advancement of the telecom sector continue to unfold, stakeholders seek to balance the industry’s operational sustainability with consumer affordability, ensuring that Nigeria’s digital landscape thrives and is accessible to all Nigerians.
