Rising data costs as threat to businesses, digital access in Nigeria

By Tosin Kolade

In recent months, Nigerians have been grappling with rising data prices as telecommunications companies increase their tariffs.

This shift has ignited widespread concerns, especially among small business owners who rely on affordable and reliable internet services to sustain their operations.

Moreover, the soaring costs are not only affecting everyday consumers but are also threatening the livelihoods of entrepreneurs in sectors where digital connectivity is essential for growth.

According to the Universal Service Provision Fund, 27.91 million Nigerians currently live in areas underserved or completely unserved by telecom services.

It may be recalled that the Nigerian Communications Commission (NCC) recently approved a 50 per cent tariff hike after telecommunications operators in the country requested an increase.

This decision comes at a time when the sector is struggling with financial challenges due to the devaluation of the naira and rising operational costs in Africa’s most populous nation.

Initially, telecom operators like MTN and Airtel requested a 100 per cent increase, but the NCC capped the adjustment at 50 per cent of current tariffs.

The regulator explained that the decision was made in consideration of ongoing industry reforms aimed at ensuring the sector’s long-term sustainability.

According to the NCC, the adjustment is necessary to address the widening gap between operational costs and current tariffs while maintaining service quality.

The commission also noted that Nigeria’s telecom tariffs had remained unchanged since 2013.

According to statistics from a market research firm Omdia, Nigeria currently has the largest mobile market in Africa, with almost 140 million mobile subscriptions by the end of 2024.

In comparison, Egypt had 128.5 million mobile subscriptions in 2024, South Africa had almost 114 million, Ethiopia had about 88 million and Kenya had over 69 million.

Omdia forecasts that Nigeria’s mobile subscriptions will surpass 292 million by 2029.

Nigeria’s four key telecom operators are MTN, which had an estimated 78.1 million mobile users by the end of 2024, Airtel with 52.1 million users, Glo Mobile with 8.6 million users and 9Mobile with 1.1 million users.

Recently, telecommunications giants in Nigeria, including MTN, Airtel, Glo and 9mobile, announced and effected increases in their data prices.

For instance, MTN Nigeria raised the price of its 15GB data plan by 200 per cent, from N2,000 to N6,000.

Similarly, Airtel Nigeria adjusted its 8GB plan from N2,000 to N3,000.

These price hikes follow months of gradual increases, pushing many users beyond their financial limits.

Analysts say in spite of the rising costs, service quality has not improved proportionally.

They say many Nigerians continue to suffer from poor network coverage, slow internet speeds, and frequent service disruptions, leaving consumers frustrated.

For small business owners, especially those in e-commerce, tech, and digital services, this increase is a major setback.

According to Micheal Egbo, a tech enthusiast, many entrepreneurs depend on the internet for marketing, customer interactions, transactions and communication.

“With these rising costs, business owners now face the difficult reality of spending more on internet services, which significantly reduces their already narrow profit margins.

“Some may be forced to scale down operations or pass the increased costs onto customers, potentially driving them away.

“For the average Nigerian, the financial strain is becoming unbearable.

“With inflation already driving up the cost of basic goods and services, the additional burden of high data tariffs is limiting people’s ability to stay connected, work efficiently, and access educational resources,” Egbo said.

As of January 2024, Nigeria had approximately 103 million internet users, representing half of the country’s population, a major increase from 83 million users in 2022.

However, in spite of this growth, challenges remain.

Nigeria’s mobile internet is ranked 80th globally in January 2025, with a median download speed of 43.79 Mbps.

Fixed broadband services is ranked 124th, with a median download speed of 48.36 Mbps.

Available data indicates that internet subscriptions fell by 15 per cent in 2024, dropping from 163.83 million in December 2023 to 139.28 million by December 2024.

Meanwhile, broadband penetration stood at 44.43 per cent by the end of 2024, falling short of the 70 per cent target set under Nigeria’s National Broadband Plan.

Many small business owners are now voicing their frustrations.

In the Federal Capital Territory (FCT), entrepreneurs report struggling with rising electricity tariffs, transportation costs, and now, soaring data prices.

Mr Cosmos Adegoke, an IT student who works remotely, lamented: “In the last few weeks, the cost of data has been very high and it is affecting my work.

“You can imagine buying data just to keep track of my productivity in line with my job description and spending so much; this is not sustainable at all.’’

Adegoke called on the government to find ways to subsidise data and internet access for Nigerians.

For Mary Yakubu, a business woman, access to internet makes her happier.

According to her, she finds comfort in watching funny videos and sharing them with her family members.

“With the way the economy is, the only thing that makes me happy is having data to watch funny videos and stories online; how do we afford this now?”, she asked.

On the other hand, telecom companies argue that the price increase is necessary due to rising operational costs, including inflation, fuel prices and currency devaluation.

MTN Nigeria CEO, Karl Toriola, defended the tariff hikes, stating that the last tariff adjustment was in 2013 and the new rates were crucial for maintaining industry sustainability.

Airtel also justified the increase, citing higher network maintenance costs and fuel prices.

Glo Nigeria, in its defence, pointed to soaring operational costs, particularly fuel and electricity expenses as the reason for the adjustment.

More so, 9mobile attributed its price hikes to global increases in technology costs, arguing that the company must protect long-term service reliability.

As a result of the price hikes, the Nigeria Labour Congress (NLC) has declared a nationwide boycott of MTN, Airtel, and Glo, running from 11:00 AM to 2:00 PM daily, starting Feb. 13.

The NLC condemned the tariff increases, warning that if telecom companies failed to reverse the new rates by the end of February,  a total shutdown of their operations would commence on March 1.

The Federal Competition and Consumer Protection Commission (FCCPC), while recognising the economic challenges faced by operators, emphasises that consumer interests remain paramount.

Additionally, it is important to note that the Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against President Bola Tinubu’s administration and the NCC over the tariff increase.

Filed at the High Court in Abuja (Suit No. FHC/ABJ/CS/111/2025), SERAP argues that the increase is arbitrary, unconstitutional and infringes on citizens’ rights to freedom of expression and access to information.

In spite of these challenges, Nigeria is implementing various initiatives to improve internet access.

One of such initiatives is the National Broadband Plan (2020-2025) which aims to provide at least 25 Mbps in urban areas and 10 Mbps in rural regions, with a goal of ensuring 90 per cent coverage by 2025.

The Broadband Alliance also seeks to increase broadband penetration from 44 per cent in 2024 to 70 per cent by 2025.

Bosun Tijani, Minister of Communications and Digital Economy, made clarifications.

“The initiative aims to achieve its goal through collaboration between public institutions such as schools, hospitals and government offices, telecom operators and infrastructure providers, technology companies, civil society organisations and international partners.

“The NBAN is more than just a policy initiative; it is a commitment to a future where every Nigerian has access to the tools and opportunities needed to succeed in a connected world,” Tijani said.

The minister said that the initiative would begin in Edo, Ogun, Kwara, Katsina, Imo, Abia, Borno, and Nasarawa States.

The minister said the states were selected because they had addressed challenges such as right-of-way fees and created enabling environment for broadband expansion.

Meanwhile, the 3 Million Technical Talent (3MTT) Programme is also training three million Nigerians to strengthen the country’s digital economy.

Additionally, organisations like Paradigm Initiative are working to improve digital literacy in underserved communities.

As telecom companies continue increasing data prices, Nigerians, especially small business owners, face the harsh reality of paying more for less.

Stakeholders say the lack of investment in infrastructure, slow internet speeds and high costs create challenges for those who depend on digital connectivity for survival.

They argue that while telecom companies need financial sustainability, the government must ensure that affordability and accessibility remain a priority.

 

News Agency of Nigeria.