Telecom Tariff Hike Fuels N4 Trillion Investment Surge, MTR Review Looms
The Nigerian telecommunications sector has experienced a significant surge in investment, amounting to approximately N4 trillion, within less than two years, directly attributed to a 50 per cent tariff hike implemented in 2025. This substantial capital inflow has been channelled into the expansion of telecom infrastructure and the upgrade of existing facilities across the country. The Association of Licensed Telecom Operators of Nigeria (ALTON) has confirmed that the impact of this tariff adjustment is now demonstrably evident throughout the sector.
In a report by Guardian Nigeria Business published on Jun 17, 2026, ALTON Chairman, Gbenga Adebayo, highlighted the positive correlation between the tariff increase and the sector’s investment trajectory. Speaking in Lagos, Adebayo welcomed the Nigerian Communications Commission’s (NCC) initiative to review the current Mobile Termination Rate (MTR), noting that operators, tower companies, and other industry participants have significantly increased their investments in network infrastructure and service enhancements. He stated that between the tariff approval in 2025 and the present, the industry has seen an additional N4 trillion invested in expanding its infrastructure.
Adebayo detailed the capital expenditure figures, revealing that the sector recorded a total capital expenditure of approximately N2.13 trillion in 2025, with planned capital expenditure for 2026 standing at approximately N1.86 trillion. He expressed gratitude to the NCC for its intervention in facilitating the tariff adjustment, which provided crucial relief to operators grappling with unprecedented increases in operating costs.
Further to the NCC Stakeholder Consultative Forum on the Determination of MTR, Adebayo commended the Commission for its commitment to transparent, evidence-based regulation and stakeholder collaboration. He underscored the fundamental importance of the MTR to the industry’s health, sustainability, and competitiveness, stressing that any review must be guided by current market realities and the overarching goal of fostering a sustainable ecosystem.
The NCC has initiated a comprehensive consultancy study to review the MTR, the first such review in eight years. The current MTR, which governs the wholesale charge one network pays another for calls terminating on its network, has remained static at N3.90 per minute for generic operators and N4.70 for new entrants since 2018. This stagnation persists despite significant economic and technological shifts in Nigeria. Industry stakeholders have long argued that the outdated rate regime fails to reflect current operational realities, exacerbated by substantial naira depreciation, soaring inflation, and escalating energy costs since the last determination.
Omotayo Mohammed, NCC Head of Competition and Tariff, presented the consultancy document, emphasising that the foundation of wholesale interconnection impacts all stakeholders. She warned that misaligned termination rates can lead to dominant operators foreclosing smaller competitors, deterring infrastructure investment, and ultimately burdening consumers. Mohammed also pointed to the rapid deployment of 5G networks, the emergence of AI-driven services, and the Internet of Things (IoT) as factors reshaping network usage patterns in ways not anticipated by the 2018 cost model. The increasing prevalence of Over-the-Top (OTT) players like WhatsApp and Telegram, which capture significant voice and messaging traffic, further weakens legacy wholesale revenue streams.
With KPMG appointed to conduct the study and engage stakeholders over the next four months, the review will also address critical gaps in the current framework, including the treatment of USSD services, vital for mobile financial services for millions of unbanked Nigerians, and Application-to-Person (A2P) SMS, which has seen substantial commercial growth. Operating under Sections 4, 96, 97, and 108 of the Nigerian Communications Act 2003, the NCC is mandated to promote investment, protect consumer interests, and foster fair competition.
The consultancy study is expected to deliver a cost-reflective MTR determination across various technology generations (2G-5G), operator categories, and clearing house arrangements. It will also propose updated International Termination Rates (ITR) to address grey-route traffic concerns, establish a formal pricing framework for Mobile Virtual Network Operator (MVNO) onboarding and interconnection, review retail price floors and caps for alignment with current cost structures, and assess the asymmetric rate structure between large and new entrant operators. The NCC has pledged to make all methodology, key assumptions, and cost model parameters available for stakeholder review, ensuring transparency.
For consumers, the review promises rates that reflect actual service costs, supporting retail affordability and improved access to digital financial services. Operators stand to benefit from cost recovery that mirrors CAPEX and OPEX realities, while a level playing field will prevent dominant operators from exploiting inflated termination barriers. Crucially, the document highlights that rates signalling the true cost of infrastructure provision will reward efficient investment and provide the transparency and predictability essential for both domestic and foreign investment, a vital consideration as Nigeria positions itself as Africa’s digital hub.
Chidi Ibisi, ATCON NEC Member (Coordinator, Telephone Operators), speaking on behalf of ATCON President Tony Emoekepre, deemed the review timely, stressing that a stable and transparent MTR is essential for preventing smaller operators from being priced out of the market by dominant players. He recommended the retention of the current asymmetric mobile termination rate structure to ensure the participation and sustainability of new entrants and smaller telecom operators with less than 10 per cent market share.
