As Nigeria celebrates 65 years of independence, the telecommunications sector has emerged as a crucial driver of economic growth and diversification, moving the economy beyond its traditional reliance on oil and gas. ADEYEMI ADEPETUN writes that since the sector’s deregulation and the introduction of GSM technology in 2001, telecommunication services have experienced explosive growth, transforming Nigeria into Africa’s largest ICT market.
As Nigeria commemorates 65 years of independence today, few sectors represent the nation’s transformative potential as profoundly as telecommunications. From the days of the state-owned monopoly with a mere handful of fixed lines to a hyper-connected, data-driven economy, the journey of Nigerian telecom is a story of unprecedented growth, economic liberation, and social re-engineering. It is, arguably, the single most impactful non-oil sector development in post-independence Nigeria.
The real revolution did not begin in 1960 but in 2001 with the liberalisation of the sector and the auction of the first Global System for Mobile Communications (GSM) licenses. This pivotal moment shattered the decades-long bottleneck of the state-owned Nigerian Telecommunications Limited (NITEL), ushering in private competition and mass mobile adoption.
Key statistical milestones and economic footprint
THE growth trajectory of the Nigerian telecom sector, particularly since 2001, is staggering and backed by compelling statistics. There has been exponential subscriber and connectivity growth.
Pre-2001, in the days of NITEL, there were just about erratic 400,000 telephone lines, but by 2005, with the coming of MTN, Econet, now Airtel and Globacom (GSM Era), the total number of active telephone lines was 19.5 million.
As of August 2025, Nigeria boasts of 171 million active telephone lines (underpinned by the NIN-SIM exercise) from about 320 million connected SIMs. The country’s teledensity grew from 0.73 per cent in 2001 to 79.14 per cent. The sector has revolved largely around the quartet of MTN with 89.6 million subscribers and 52.3 per cent market share; Airtel, 58 million customers and 33.89 per cent penetration; Globacom with 20.9 million users, has 12.2 per cent market reach and T2 (9mobile) has 2.7 million customers and 1.59 per cent spread. It is worthy of note that Nigeria’s telecom sector is estimated to worth $76 billion.
Today, with data consumption by Nigerians rising to 1.2 terabytes reflecting a fundamental shift to a digital-first lifestyle, powered by the move to 4G as the majority technology, broadband penetration surges to 48.81 per cent, though still about 21.19 per cent away from the 70 per cent targeted to be attained by December 2025 as enshrined in the National Broadband Plan 2020-2025.
The telecom sector’s financial muscle has made it a core pillar of the Nigerian economy, especially given its contribution to the country’s GDP. The Information and Communications Technology (ICT) sector, largely driven by telecommunications, contributed 11.18 per cent to Nigeria’s GDP in the second quarter of 2025.
The ICT sector, which covers Telecommunications and Information Services, Publishing, Motion Picture, Sound Recording and Music Production, as well as Broadcasting, recorded a year-on-year real growth rate of 6.61 per cent in Q2.
Analysis of the Q2 2025 GDP Report further showed that the performance of the sector improved strategically. The sector grew by 2.23 percentage points over the 4.38 per cent growth recorded in the same quarter of 2024. On a quarter-on-quarter basis, the sector’s real growth was even stronger at 9.58 per cent.
The sector’s liberalisation attracted billions in Foreign Direct Investment (FDI), becoming one of the most significant recipients of private capital in the country’s history, though currently plummeting. As of Q1, 2025, FDI into the sector dropped by 58 per cent year-on-year to $80.78 million.
Telecom operators contributed substantial revenue to the government through taxes, levies, and spectrum licensing fees, such as the $820.8 million generated from the initial 5G spectrum licenses.
Telecom as the digital catalyst
THE telecom sector is not just an industry; it is the infrastructure backbone that underpins growth in virtually every other sector of the Nigerian economy. The industry has powered financial inclusion and the fintech revolution. The ubiquitous mobile phone has become a banking tool, driving financial inclusion to previously unbanked rural populations.
Indeed, Nigeria has seen a rise of mobile money operators (MMOs) and the subsequent Fintech boom (companies like Flutterwave, Paystack, and Interswitch) are direct consequences of high mobile penetration.
Today, telecom infrastructure plays a central role in the Central Bank of Nigeria’s cashless policy, facilitating electronic transactions and reducing the burden on physical banking infrastructure. The USSD remains a testament.
By providing a platform for communication and connectivity, telecommunications has birthed an entire digital ecosystem. For instance, there has been a boom in e-commerce. Platforms like Jumia and Konga rely entirely on mobile and Internet connectivity, connecting millions of buyers and sellers across the country.
In addition, Small and Medium Enterprises (SMEs) now use mobile phones for inventory, marketing (social media), and processing payments, dramatically reducing the cost of doing business.
Nigeria’s telecom sector has created hundreds of thousands of direct and indirect jobs—from technicians and network engineers to mobile phone retailers, repairers, and content creators. A senior member of the Association of Telecom Companies of Nigeria (ATCON), who spoke with The Guardian anonymously, estimated that the sector must have created over 2.3 million jobs within a decade.
Beyond commerce, connectivity has profoundly altered Nigerian social dynamics. Mobile broadband enables access to remote learning resources and telehealth services, bridging geographical divides, especially in underserved regions.
Instant, affordable communication has strengthened family and social ties across Nigeria’s vast diaspora and within the diverse ethnic landscape. The mobile phone is the primary source of news and information for most Nigerians, fostering greater civic engagement, although also presenting challenges related to misinformation.
Future challenges and opportunities
WHILE the achievements are monumental, the sector faces persistent challenges that must be addressed for Nigeria to fully reap the benefits of the digital age.
Despite high teledensity, significant gaps persist in rural and remote connectivity, highlighting the need for more investment in infrastructure and spectrum rollout in unserved areas. Today, there are close to 25 million Nigerians still unserved and underserved in over 100 communities.
The sector still faces frequent acts of vandalism, fibre cuts, and cable theft plaguing operators, disrupting quality of service and escalating operational costs. In the last seven months of 2025, MTN alone reported over 5,400 fibre cuts.
Challenges in maintaining consistent and high-quality service, coupled with issues like multiple taxation and regulatory bottlenecks at sub-national levels, hinder further expansion.
The cost of smartphones and data remains a barrier for the poorest segment of the population, which can impede the goal of nationwide digital inclusion.
Experts’ submissions
WHILE the future is bright with opportunities, experts have called for more concerted efforts, especially in overcoming current challenges.Speaking with The Guardian, Innovation and Technology policy advisor and founder of Jidaw.com, Jide Awe, said, despite these gains, there are significant challenges, including cybercrime and a persistent lack of digital inclusion, leaving many outside the digital loop.
Awe said that due to infrastructure, broadband, power, and skills challenges, many Nigerians, especially those outside the rural areas, are unable to fully participate, contribute, and gain from the digital space. He added that low incomes and widespread poverty are also critical factors.
“Moreover, local content development and adoption need to improve to keep digital costs down and reduce dependence on imported equipment. This gap should urgently be closed to make digital more widespread and meaningful, especially with regard to reducing unemployment and improving the overall quality of life in Nigeria. Technology matters, but it’s always about people. A lack of an innovative mindset and a “foreign first” bias, unfortunately, still prevails in some critical areas. We must be more strategic about mainstreaming technology responsibly into the economy and society,” Awe stressed.
According to him, there is a shortage of advanced digital skills, which isn’t helped by the ongoing “Japa” talent migration. He said strategies to turn this migration into a circular advantage need to be more effective.
From her perspective, the member of the ATCON said long delays in permit processing and multiple regulatory bodies pose challenges. While scoring the sector eight out of 10 in terms of performance, she said, despite growth, investment in telecoms with private sector participation remains relatively low and statistically insignificant in driving economic growth.
“The sector faces challenges due to rising exchange rates and constrained access to foreign exchange, impacting investment and equipment procurement. Overall, the ICT/Telecoms sector has been a significant driver of Nigeria’s economic growth, but addressing the gaps will be crucial for sustained progress,” she stated.
CEO, Mobile Software Nigeria, Chris Uwaje, said that at 65 years, Nigeria is expected to have made significant progress in various areas such as a robust and world-class economic growth driven by foresighted quality education, proactive cultural development, dynamically focused infrastructure and deterministic good governance supercharged by a sustainable leadership model.
“All the above can and should be attained by prioritising a merit-first mechanism to enhance trust and national security. All said, the best of the Nigerian nation is yet to come. And the engine room to fire and actualise the mission resides in our youths, powered by information technology. Finally, I miss the absence of black colour in the Nigerian flag. Because black is beautiful and must be exponentially expressed by no other nation but Nigeria,” he stressed.
