The Cost of Data in Nigeria is the lowest in West Africa” – GSMA Report reveals

Nigeria stands out globally for its affordable mobile data costs, offering cost-effective connectivity services to data users nationwide. 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. This position was affirmed by the International Telecommunications Union (ITU) and revealed in the GSMA report on “The role of mobile technology in driving the digital economy in Nigeria”.

“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 for 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 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 which contributed to the challenges of telecoms 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 the 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 the 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

Nigeria’s Telcos Seek Tariff Adjustment as Data Charges Remain Lowest Globally

Amidst the clamour for tariff adjustment due to mounting challenges, a study has revealed that data charges in Nigeria are among the lowest in the world. In a deep dive into Nigeria’s telecom sector, the Groupe Spécial Mobile Association’s (GSMA) study highlights critical challenges negating Nigeria’s digital economy, including unsustainable tariffs.

According to the report, “Nigeria has some of the lowest data cost baskets in Africa. The cost for a data-only package is the lowest in West Africa and well below the average in Africa.” Recent studies have shown that the average cost of 1GB of data in Nigeria is $0.38. This compares to $0.59 in Kenya, $0.68 in Ethiopia, $1.77 in South Africa, and $6 in the USA. Today, Nigeria has some of the cheapest data prices for its citizens anywhere in the world.

While this situation is beneficial for consumers, the telcos express fears of the collapse of the entire industry due to mounting challenges. Experts within the sector and the economy, like Karl Toriola, CEO of MTN Nigeria, and Bismarck Rewane, CEO of Financial Derivatives, have postulated that the sector is on the verge of collapse, which portends consequential risks to other sectors that rely on the critical services the telcos provide.

Nigeria’s economy has experienced two major recessions over the last 10 years and currently faces one of its most difficult periods of uncertainty. Recent market conditions and currency devaluation have plunged the value of the Naira in the foreign exchange market, resulting in skyrocketing prices of commodities. Unfortunately, the telecommunications sector, which contributes approximately 16% to Nigeria’s GDP, is, like other sectors, not immune to the profound repercussions of the prevailing economic upheavals.

The telecoms industry, like many others in the country, is heavily reliant on foreign exchange (FX) for the procurement of essential equipment, infrastructure, and technology. With a significant portion of telecom equipment and services being imported from foreign markets, fluctuations in currency exchange rates directly impact the cost of operations for industry players. As the value of the Naira fluctuates against major currencies such as the US Dollar and Euro, the cost of procuring equipment and services denominated in foreign currencies escalates, placing immense strain on the financial resources of telecom companies.

MTN Nigeria and Airtel were among 11 listed companies, including Nestle and Dangote Cement Plc, which recorded 2.02 trillion naira FX losses in H1 of 2024. Dr. Karl Toriola, Chief Executive Officer of MTN Nigeria, has described 2024 as a “reset year” for the telecommunications sector, one defined by unprecedented challenges yet buoyed by critical reforms and the promise of a stronger future.

In a wide-ranging interview on Channels TV, Dr. Toriola shared insights into the economic pressures faced by the industry, the steps taken to safeguard its sustainability, and MTN Nigeria’s plans for 2025. “2024 was incredibly tough for the telecoms industry,” Dr. Toriola stated, pointing to two primary factors: severe currency devaluation and record inflation rates. “Costs have skyrocketed. Spending 160% of revenue just to maintain operations is not a sustainable business model. This is a risk that faces the continuity of essential telecom services for millions of Nigerians.”

While the telcos are asking for a 100% increase in tariff to sustain their operations, the Minister of Communications and Digital Economy, Dr. Bosun Tijani, has assured that there would be tariff adjustments, but that it would not be 100%.