Over the past decade Nigeria has become the largest telecoms market in Africa and the Middle East, with more than 140m active telecoms subscribers in 2015, according to the Nigerian Communications Commission (NCC), the federal telecoms regulator. As is the case elsewhere in frontier and emerging markets, mobile subscribers accounted for over 99% of this total, with virtually all of that segment controlled by the country’s four GSM operators: MTN Nigeria, Airtel Nigeria, Globacom and Etisalat Nigeria. The rise of Nigeria as one of the continent’s leading telecoms markets is synonymous with the rapid expansion in mobile services. From just 4m in 2003, the country’s mobile subscriber base has grown more than 1000% to the current level.


In an effort to streamline oversight, in 2011 the government moved all of the country’s telecoms regulators and related entities under the newly formed Federal Ministry of Communication Technology (FMCT). Then in 2012 the FMCT announced that it planned to merge the NCC, the National Broadcasting Commission and the Nigerian Postal Service into a single communications regulatory entity. In April 2014 this plan was scrapped, reportedly due to high costs and political and bureaucratic complexities. Consequently, the FMCT will serve as a the policy coordination and development body for the country’s communications strategies, while individual entities under the ministry will continue to execute their regulatory mandates.

Established in 1992, the NCC has a mandate to create “an enabling environment for competition among operators … as well as ensuring the provision of qualitative and efficient telecoms services throughout the country”. Under the 2003 Nigerian Communications Act, the commission is responsible for licensing service providers across the mobile, fixed-line and internet segments. Nigeria’s mobile telecoms market was liberalised in the early 2000s, when the NCC issued a handful of GSM licences. Additionally, the commission has a mandate to oversee the country’s telecoms-related spectrum resources (see analysis).

Other telecoms and ICT regulatory agencies that fall under the FMCT include the National Information Technology Development Agency, which has a broad mandate to facilitate the expansion of ICT in Nigeria; Nigerian Communications Satellite ( NigComSat), an independent state-owned company that manages NigComSat-1R, a Nigerian geostationary communications satellite; and Galaxy Backbone, which is a state-owned ICT service provider.


Several telecoms development plans are under way. In April 2013 the NCC launched the Strategic Management Plan (SMP), which is set to run to 2017. Developed in 2012 by PwC with input from various industry stakeholders, the SMP includes provisions aimed at boosting access to telecoms services in rural and urban areas alike, attracting additional investment to the sector, and streamlining the industry’s regulatory framework. Broadly, under the 2013-17 SMP the NCC plans to make market-based investments in telecoms, with the goal of jump-starting private sector-led development.

A key component of the SMP is the NCC’s Universal Service Provision Fund (USPF), which was set up under the 2003 Communications Act to finance telecoms provision in hard-to-reach areas and among underserved populations. The USPF will be used to subsidise new mobile base transceiver stations and broadband networks in rural areas, for example, in addition to new hardware and software for use in schools and universities. Targets include the construction of 5000 new base stations and 15,000 km of fibre-optic cable in underserved areas. USPF-financed subsidies are also a key component of the government’s efforts to encourage mobile network operators (MNOs) to share infrastructure.

The current SMP builds on a previous iteration of the plan, which ran from 2007-11 and was developed around similar goals. According to the NCC, many of the targets laid out in this earlier version of the plan went unachieved as a result of a lack of oversight and institutional capacity. In an effort to avoid these issues during the implementation of the current plan, the NCC has invested in training, improved oversight and institutional development.

Since the FMCT was established it has also rolled out two major long-term development programmes. Launched in 2012, the National ICT Policy (NICTP) is a wide-ranging, top-level strategy for the development of the telecoms and ICT industries through 2020. Organised into 23 themes, the plan was developed in line with Vision 20:2020, the nation’s overarching economic development plan (see IT overview). The National Broadband Plan (NBP) was also launched in 2012 in conjunction with the NICTP, with the goal of improving high-speed access to the internet throughout the country (see analysis).

By the Numbers

By early 2015 Nigeria had established itself as one of Africa’s biggest telecoms markets. In January 2015 the country was home to some 140.8m telecoms subscribers, up from 127.6m at the end of 2013, 113.2m at the end of 2012 and 95.8m at the end of 2011. In January 2015 fixed-line subscribers accounted for just 0.13% of total telecoms subscribers, while mobile CDMA subscriptions accounted for 1.5%, with mobile GSM subscriptions making up the remaining 98.37%.

In terms of telephone density (teledensity) – a measure of the number of subscribers per 100 people in a given market – in December 2014 Nigeria stood at 99.32, up from 91.15 at the end of 2013, 80.85 at the end of 2012 and 68.49 at the end of 2011, according to data from the NCC.

MTN holds the largest share of the mobile market, accounting for 44% of total mobile subscribers, followed by Globacom, with 21%, Airtel, with 20% and Etisalat, with 15%, according to the NCC. A growing number of Nigerians access the internet via their mobile phones, which is helping to improve operator revenues. Nigeria accounts for 29% of all internet usage in Africa, and most Nigerians access the internet via their mobile handsets (see IT overview).

The rapid growth of the telecoms industry over the past decade or so has had a major impact on the country’s economy. As of August 2014 the sector accounted for 8.5% of Nigeria’s GDP, up from 5.7% in 2011 and just 1.1% in 2003, according to the NCC. Segun Ogunsanya, Airtel Nigeria’s CEO, said that the country’s telecoms operators contribute N60bn ($366m) in taxes to government coffers on an annual basis, plus N55bn ($336m) in other levies. “The direct contribution of telecoms operators to the country’s GDP is estimated at N400bn ($2.44bn) in 2012,” he told local media in May 2014.

Given rapidly rising demand and the high costs of network expansion, the industry has accounted for a considerable amount of foreign direct investment (FDI) in recent years. “Cumulative FDI in Nigeria between 2001 and 2011 was around $45bn,” said Ogunsanya. “Telecoms accounted for around 35% of that. During some individual years, such as 2009, the sector provided more than half of the country’s FDI.”

Mobile Market

The mobile market comprises four GSM operators who hold virtually the entire telecoms subscriber base. MTN, Nigeria’s largest telecoms player in terms of customers, has been operating in the country since February 2001, when it won a 15-year digital mobile licence from the NCC. MTN is a subsidiary of South Africa’s MTN Group, which is one of the largest telecoms multinationals in Africa and the Middle East. In the first four months of 2014 the MTN Group as a whole reported an overall subscriber increase of 2%, driven in large part by MTN Nigeria, which added 1.1m new users during this period. By January 2015 MTN Nigeria had 60.5m subscribers, which was equal to 44% of the country’s overall mobile subscriber base and around a quarter of MTN Group’s total subscribers.

MTN has invested heavily in Nigeria in recent years. In 2012 the company spent $1.5bn on capacity building in the country, followed by a similar amount in 2013, and it plans to spend $3bn on additional upgrades through to 2016. “We will continue to invest at this rate in the medium term, and make sure the quality of service is acceptable,” Sifiso Dabengwa, MTN’s group president and CEO, told local media.

Nigerian-owned Globacom has been active in the country since 2003. As of January 2015 it had 28.49m subscribers, which represented 21% of the total domestic mobile market. Like its competitors, Globacom has invested heavily in its home market in recent years. In 2013 and 2014 it carried out a complete infrastructure overhaul, upgrading more than 3000 existing base stations to boost both voice and data coverage. “Currently, 43% of our telecoms sites are 3G,” Bisi Koleosho, Globacom’s head of operations, said in May 2014. “In the next six months we will have 90% 3G coverage in Nigeria.” In 2014 Globacom announced that it planned to sign a $100m contract with an original equipment manufacturer to add 1500 new base stations throughout the country.

Airtel is Nigeria’s third-largest player, with 27.99m subscribers in January 2015, equal to 20% of the mobile market. Airtel Nigeria is a subsidiary of Indian telecoms conglomerate Bharti Airtel, which entered the market in 2010 after buying all of Kuwaiti telecoms firm Zain’s African assets for $10.7bn. Since then Airtel has steadily gained market share in Nigeria, on the back of infrastructure investments worth more than $1.7bn between 2010 and 2014. At the World Economic Forum on Africa, held in Abuja in May 2014, Sunil Mittal, Bharti Airtel’s chairman, said that Nigeria remained a key market for the firm, despite the competitive domestic operating environment. “The taxes are very high. They need to come down,” he told local media. “We don’t have designs to expand at the moment, but in the countries that we operate we are strengthening our position.”

UAE-based telecoms firm Etisalat acquired a Nigerian digital mobile licence in 2007. As of January 2015 the company had 21.56m subscribers in the Nigeria, making it the fourth-largest provider, with 15% of the market. Between 2007 and 2014 Etisalat invested approximately $1bn into its Nigerian operations. As of June 2014 the company reportedly managed a national network of around 4500 base stations and 2800 km of fibre-optic cables, much of which has recently been upgraded. Etisalat Nigeria has benefitted from number porting since the NCC introduced mobile number portability (MNP) in 2013. “We have 45% port-in and 9-10% port-out,” Matthew Willsher, the company’s acting CEO, told local media in June 2014. “Porting has become very easy now and this is good for customers.”


A handful of domestic operators continue to operate networks that utilise CDMA technology, though the segment has contracted considerably alongside the rapid rise of GSM operators over the past decade. While CDMA operators dominated the market in the early 2000s, as of January 2015 CDMA subscriptions accounted for just 1.5% of the market, according to data from the NCC.

The decline of CDMA in favour of GSM technology can be attributed to higher voice and data costs on the former, which is related to the high levels of price competition among the four major MNOs, all of which operate GSM networks. In 2012 three CDMA operators – Multilinks, Starcomms and MTS First Wireless – set out to merge their assets and operations under the brand Capcom. While the merger was approved by the NCC in 2013, the process has stalled. The firm attributed the delay to regulatory issues and the fact that Capcom is working to facilitate a shift towards 4G LTE technology. The NCC has threatened to withdraw Capcom’s operating licence if the company fails to complete the merger soon.

Regulatory Enforcement

In April 2013 the NCC launched MNP, under which mobile subscribers are allowed to switch to a difference operator while keeping the same number. This initiative was initially expected to have a positive impact on both quality of service (QoS) and cost, as a result of MNOs working harder to hold on to their customers. However, since it was launched a variety of issues have hindered the rapid uptake of MNP in Nigeria. These include requirements that a subscriber must be present at an operators’ shop to initiate porting; a two-day porting processing period; and operators stalling or refusing to carry out a requested port, particularly in the case of high-value subscribers.

Porting uptake has been slow. According to the NCC, 12,494 ports were carried out in January 2015 among all four MNOs, generally in line with monthly averages since the programme began. With this low figure in mind, the NCC could potentially review the initiative, with an eye towards streamlining the porting requirements and boosting awareness of the availability of MNP, particularly in rural areas.

In recent years the FMCT and related agencies have implemented a number of new regulations and policies. Alongside regulators elsewhere in the region, such as Ghana’s National Communications Authority, the NCC has taken a proactive and forceful approach to improving QoS, for example, levying fines and other sanctions on operators that consistently fail to meet a series of key performance indicators (KPIs). The KPIs, which were developed by the commission and are measured on a monthly basis, include operators’ call set-up success rate, dropped-call rate and measures of call traffic congestion.

In February 2014 the NCC issued N647.5m ($3.95m) in fines to three of Nigeria’s largest operators: N277.5m ($1.69m) to Globacom and N185m ($1.13m) each to MTN and Airtel. A few days later the NCC announced that it had barred the same three operators from selling new SIM cards throughout the month of March, and from promoting their services for the same period, until they met the KPI standards. This follows on a series of fines issued to all four major operators in 2012 and 2013. Finally, in early 2014 the NCC issued new corporate governance requirements for the telecoms industry, in line with international best practice.

Underutilised Capacity

As a result of the high levels of investment in telecoms infrastructure by mobile operators over the past decade, Nigeria’s installed network capacity far exceeds the number of active mobile subscriptions in the country. According to the NCC, as of February 2014 the nation had a total installed capacity of 247.7m lines. With 129m active lines present in the same period, the country’s installed capacity dividend – i.e. the number of unused installed lines – was nearly 119m lines.

With this in mind, a variety of local players and market observers expect Nigeria to attract an influx of mobile virtual network operators (MVNOs) in the coming years. MVNOs are established or under consideration in a number of African markets, including Kenya and South Africa. MVNOs, which do not own any of their own spectrum or infrastructure, lease unused capacity from existing MNOs and sell it on to end-users under their own brand. These companies rely primarily on customer service, pricing and marketing to set themselves apart from the operators and other competitors.

“It is a fantastic way to effectively utilise the idle capacity,” Seyi Adeoye, a director at TNS-RMS, the Nigerian subsidiary of UK-based market research firm TNS, told local media in July 2013.

New Players

While the big four GSM providers dominate the domestic mobile segment, smaller players are active in niche areas. A handful of new operators have launched 4G long-term evolution (LTE) networks in urban areas in recent years, for example. In February 2014, Smile Communications, a Ugandan company, launched an LTE network in Lagos on the 800-MHz spectrum. The firm has a three-year contract with Swedish original equipment manufacturer Ericsson to deploy more than 1100 LTE sites in Nigeria up to 2016. Smile launched an initial test network in Ibadan in February 2013, and plans to continue to expand its coverage. A handful of other firms also provide 4G LTE services, including Swift and Spectranet, both of which operate networks in urban areas but have plans to expand.

Fixed Line

As with many African markets, Nigeria’s fixed-line market has shrunk dramatically in recent years, and accounts for less than half a percent of the telecoms market, according to NCC data. Prior to 2000 the fixed-line market was controlled by the state-owned firm Nigerian Telecommunications (NiTel), which, along with its mobile subsidiary MT el, was the monopoly operator. Since the sector was liberalised in the early 2000s both companies have seen rapidly declining subscriber numbers.

NiTel remains one of the country’s largest fixed-line service providers, along with a handful of others, all of which have seen steadily shrinking profits in the past decade. In March 2014 the government’s Bureau of Public Enterprises – which manages many of Nigeria’s state-owned assets – announced that it planned to liquidate NiTel (and MT el). Selling the firm’s assets – which include spectrum and telecoms infrastructure – follows on a series of failed state-led efforts to re-capitalise the company in order to make it competitive again.

While fixed-line telephony has declined rapidly in Nigeria, demand for high-speed broadband networks has driven expansion of the fixed-line data segment. Though most Nigerian internet users access online services via their mobile handsets, high-speed fixed broadband services are increasingly popular in urban areas, in particular. According to Paul Budde Communication, an Australian telecoms consultancy, around 80 companies are licensed to provide fixed data services in Nigeria. The sale of NiTel’s assets represents a major opportunity for these firms, which have worked to boost their infrastructure in recent years, particularly in rural areas (see IT overview).

High-Speed Data

The NCC has overseen a dramatic reduction in mobile tariffs over the past decade. When GSM mobile services were introduced in 2001 call costs ran extremely high. By 2013 all four providers offered calling for less than N20 ($0.12) per minute. Between 2011 and 2013 mobile tariffs fell by around 30%, according to NCC data. While this drop can be attributed in large part to price competition among the major operators, the NCC has also played a role by facilitating decreases in interconnection rates, which fell in 2003, 2006 and 2009. In early 2013 the commission slashed interconnection rates again and rolled out a three-year initiative to reduce rates on an annual basis through 2016.

In line with declining tariffs, most of Nigeria’s operators have seen declining revenues on a per user basis in recent years. According to data from Informa Telecoms and Media, a UK-based research house, average revenue per user (ARPU) among Nigeria’s mobile operators declined by 4% in 2013, for example. This drop follows a series of similar declines in previous years. In an effort to boost ARPU in the future, Nigeria’s mobile operators are working to build up their mobile internet capacity, which is widely considered to be the future of telecoms in Nigeria and Africa as a whole. With this in mind, a substantial percentage of the large investments that had been made in telecoms in recent years have gone towards expanding 3G services and laying the groundwork for 4G LTE services.

Hardware Market

According to research and consulting firm GfK, Nigeria is one of the fastest-growing smartphone handset markets in the world. In 2012 sales of smartphones doubled on the 2011 figure, with Nigerians spending N92bn ($561m) on 1.82m smartphone handsets.

Many of the largest handset producers are increasingly active in the country. The world’s top two smart-phone vendors – Apple and Samsung – both sell handsets in Nigeria, and in February 2014 Lenovo, the third-largest smartphone producer in the world, announced that it planned to begin sales in the country before the end of the year. Lenovo is entering an increasingly competitive market. In addition to Samsung and Apple, smartphone manufacturers that were active in Nigeria include BlackBerry, Nokia, Tecno Telecom and Huawei.

Despite the rapid growth of the smartphone handset market in recent years, with an average price of N48,000-58,000 ($293-354), they remain out of reach of most citizens. In an effort to crack the middle and low-end of the market, a number of manufacturers are working to develop sub-$150 and even sub-$100 smartphone handsets. While Chinese firms like Tecno Telecom and Huawei are leading this effort, in 2013 new Nigerian smartphone manufacturer Solo launched its first two products. Solo’s handsets, which run on Google’s Android mobile operating system, are expected to retail for less than N20,000 ($122) and N30,000 ($183), respectively. The expansion of Nigeria’s smartphone market in recent years has gone hand-in-hand with an uptick in production of local internet content (see IT analysis).


The sector faces a number of pressing challenges. While most urban residents have access to a wide range of telecoms services, connectivity is lacking in many of the country’s rural areas. Similarly, a substantial percentage of the subscriber base continues to experience QoS issues, such as dropped calls or call interference, on a regular basis. Finally, like other Nigerian businesses and citizens, the sector has had to contend with broader structural issues, including the unreliable electricity grid, security concerns and a challenging domestic business environment. Operators, meanwhile, face the daunting task of providing steadily improving levels of QoS to a rapidly expanding subscriber base across a huge, geographically diverse area, even as ARPU comes under pressure. Nigeria’s overall telecoms capacity is relatively high – a number of high-capacity submarine cables come ashore in the country – but bringing this capacity into people’s homes remains a major hurdle (see IT overview).

Yet despite the challenges, most indicators point to continued expansion. All four providers have either recently invested or are planning to invest substantial sums in telecoms infrastructure in the country. Taking into account the nation’s large population and solid economic fundamentals, most local players are counting on continued rapid telecoms uptake.