Right of Way crisis: Telcos’ operating costs soar to N5.8trn — NCC

By Juliet Umeh

Nigeria’s telecommunications industry recorded a sharp rise in operational expenses in 2024, with total operating costs, OPEX, hitting an unprecedented N5.85 trillion, according to the latest data released by the Nigerian Communications Commission, NCC.

This represents an 85 per cent increase compared with N3.16 trillion recorded in 2023, a surge the Commission attributed to persistent inflation, foreign exchange pressures, rising energy costs, and high Right of Way (RoW) fees imposed by several state governments.

In its newly released industry report, the NCC stated: “Most licensees complained of high Right of Way, RoW, fees, harsh macroeconomic conditions, and rising inflation. However, the Commission has been able to secure zero RoW fees in some states in 2024.”

The RoW charge — a fee paid by telecom operators to lay fibre-optic cables across public spaces — remains one of the biggest obstacles to broadband expansion in Nigeria. Despite the Commission’s engagement with state governments to harmonise or eliminate the fees, wide disparities persist across states.

While the Federal Government approved a uniform rate of N145 per linear metre in 2020, some states charge several times higher. Ogun State leads with N9,477 per linear metre, followed by Lagos (N6,264), Oyo (N5,303), Cross River (N4,737), Rivers (N4,047), Edo (N3,491), and Ondo (N3,075).

The Executive Vice Chairman, EVC, of the NCC, Dr. Aminu Maida, however, revealed that efforts to engage with state authorities are yielding results.
He said: “In the past year, five additional states — Adamawa, Bauchi, Enugu, Benue, and Zamfara — joined those that have eliminated RoW charges. This brings the total to 11 states now offering zero-cost RoW to accelerate broadband infrastructure deployment.”

Despite these gains, analysts warn that Nigeria’s broadband penetration target of 70 per cent by 2025 may no longer be achievable. As of September 2025, broadband penetration stood at 49.3 per cent, underscoring how the high cost of RoW continues to slow infrastructure rollout.

Dr. Maida explained: “One of the most significant barriers to broadband deployment has been the high RoW fees charged by some states, despite the resolution by the Nigerian Governors’ Forum fixing the rate at N145 per linear metre. These elevated fees have delayed and, in some cases, reduced network expansion plans.”

Corroborating this, Chairman of the Association of Licensed Telecommunications Operators of Nigeria, ALTON, Engr. Gbenga Adebayo, lamented that the implementation of the National Broadband Plan had been hindered by unresolved issues.
He said: “Multiple taxation, excessive RoW charges, and hidden levies imposed by some states are discouraging investment. Even in states that claim to have waived the fees, operators still face backdoor charges in the form of education taxes and highway levies.”

Adebayo added that unless these challenges are addressed, Nigeria’s dream of achieving full broadband coverage and digital inclusion will remain elusive.
“We need stronger policy enforcement to harmonise rates nationwide. Without affordable access for operators, the cost burden will continue to trickle down to consumers,” he stressed.

Meanwhile, the NCC report showed that operators’ domestic capital expenditure, CAPEX, also surged by 159 per cent year-on-year — from N1.12 trillion in 2023 to N2.9 trillion in 2024. The increase was largely attributed to the exchange rate unification and inflationary pressures, which inflated the cost of imported network equipment.

According to the report, operators invested heavily in network modernisation, fibre expansion, and 5G rollout despite a weakening naira and economic headwinds. “These CAPEX figures reflect not only new infrastructure builds but also the increased cost of maintaining competitive service quality,” the NCC noted.

Despite the record expenses, the telecom sector still posted a 44.7 per cent revenue growth, rising from N5.30 trillion in 2023 to N7.67 trillion in 2024. This growth was driven by higher data consumption, increased subscription rates, and expansion into enterprise solutions.

Industry analysts said the figures show that the sector remains one of Nigeria’s most resilient contributors to GDP despite inflation and currency pressures.

Worried by the rising operational costs and declining margins, the NCC earlier this year approved a 50 per cent tariff adjustment for operators, allowing them to transfer part of their cost burden to consumers.

A telecom industry source said: “The tariff review provided some relief for operators, helping major players like MTN return to profitability after several quarters of pressure.”

The NCC said it would continue to work with both federal and state authorities to streamline RoW charges and promote policies that lower the cost of doing business in the telecom sector.

Dr. Maida reaffirmed: “Affordable and harmonised RoW charges are critical to our broadband and digital economy goals. The Commission remains committed to ensuring that Nigeria achieves sustainable connectivity growth for all citizens.”

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