The Association of Telecommunications Companies of Nigeria (ATCON) has declared that Nigeria's telecommunications sector, the backbone of the nation's digital economy, is buckling under the weight of a crippling 33 per cent interest rate regime. In a passionate presentation at the Nigerian Communications Commission (NCC) Stakeholders Consultation Meeting on the commencement of the study on the determination of Mobile Termination Rates (MTR) in Nigeria, ATCON warned that without urgent regulatory intervention to establish cost-reflective termination rates, the sector's sustainability, and by extension, Nigeria's ambition of becoming a $1 trillion economy by 2030, is in grave jeopardy.
While the telecom sector has grown exponentially from a modest $500 million investment at liberalization in 2001 to over $75.6 billion today, ATCON's Coordinator of Telephone Operators, Chidi Ibisi, painted a grim picture of the prevailing economic headwinds threatening to undo decades of progress. “High Interest Rates of over 33 per cent, high Foreign Exchange rates, high inflation, and the soaring cost of imported network equipment, diesel, and transportation are severely impacting the capital and operating expenses of our members,” Ibisi told the gathering. “This significantly affects their ability to maintain the high levels of investment required to drive the new digital economy.”
Investment Plans Under Threat
ATCON noted that despite these headwinds, telecom operators are still planning to invest over $1.38 billion this year alone in network capacity upgrades, resilience, coverage enhancement, and quality of service improvements. However, the association stressed that such investments are unsustainable without a pricing framework that reflects the true cost of operations.
The association further highlighted a litany of operational nightmares, including the high cost of repairing damaged fibre optic cables from road construction and vandalism, the staggering cost of replacing stolen generators, batteries, and vital base station equipment, as well as the burdensome Right-of-Way (RoW) charges and multiple taxation imposed by several states.
Call for Cost-Reflective Rates
Citing Section 108 of the Nigeria Communications Act (NCA) 2003, ATCON reminded the Commission that tariff rates must be cost-oriented, fair, and, most critically, structured to attract investments into the communications industry. “To ensure the sustainability of the Telecom Sector, which underpins every sector of the economy and propels Nigeria toward a $1 trillion economy, we need cost-reflective Mobile Termination Rates,” Ibisi asserted.
In a key recommendation aimed at protecting smaller players, ATCON called for the retention of the current asymmetric Mobile Termination Rate structure to guarantee the participation and sustainability of new entrants and smaller operators with less than 10 per cent market share.
Sector Statistics and Warning
The presentation comes at a time when the sector boasts over 185.7 million mobile subscribers, 153.15 million Internet subscribers, Internet data usage exceeding 1.4 million terabytes, a teledensity of 85.67 per cent, and an 8.12 per cent contribution to GDP in Q4 2025, according to the National Bureau of Statistics. ATCON pledged its full cooperation with the NCC study on MTR determination, while making it clear that the outcome must reflect the stark economic realities facing operators. “Failure to adopt cost-reflective rates will not only stifle investment but could reverse the monumental gains recorded in the sector over the last two decades,” Ibisi warned.
Government Dismisses IMF Tax Reports
Meanwhile, the Federal Government has dismissed reports suggesting that it has introduced or is considering new taxes on telecommunications services and petroleum products following the release of the International Monetary Fund's (IMF) Article IV Consultation Report on Nigeria. In a statement issued by the Federal Ministry of Finance, the government said the reports misrepresented the contents of the IMF report and did not reflect its policy position.
The ministry explained that the IMF's Article IV Consultation Report contains the Fund's assessment of Nigeria's economic outlook and policy recommendations for consideration by the authorities. However, it stressed that such recommendations are advisory in nature and do not constitute government policy or binding commitments. According to the ministry, decisions on taxation are made through established constitutional and legislative processes, guided by national priorities and prevailing economic realities.
The government also clarified that the Value Added Tax (VAT) waiver on petroleum products remains in force and has not been withdrawn. Addressing concerns over a possible fuel surcharge, the ministry noted that while existing legislation provides for such a levy, its implementation would require a ministerial order and publication in the Official Gazette.
