Financial Well-being and Service Excellence: A Look at Network Operators (International Edition)

According to SONNY ARAGBA-AKPORE, telecom service providers are experiencing numerous obstacles that are affecting their operations.

In March 2024, Mobile Network Operators (MNOs) expressed disappointment over lost income when their services were adversely affected during an internet blackout caused by damage to certain fiber-optic cables.

In early 2023, MTN Nigeria experienced over 6,000 disruptions to its fiber optic lines. Between 2022 and 2023, the company moved approximately 2,500 kilometers of susceptible fiber cables at a cost exceeding N11 billion—funds sufficient to construct about 870 kilometers of new fiber connections in underserved regions.

In August 2024, Carl Cruz, who serves as the CEO of Airtel Nigeria, mentioned at an industry conference that their telecommunications firm has been experiencing approximately 1,000 fiber optic cable disruptions monthly. These incidents result in significant financial expenses and lost income for the business.

Both leading service providers experienced numerous disruptions to such an extent that even their Mobile Switching Centers (MSCs) and Base Transmitter Stations (BTS) were impacted, consequently degrading the overall quality of service (QoS).

Even though they took the difficult steps to address the infrastructure problem, several individuals have struggled to reach the Quality of Service standards mandated by regulatory bodies such as the Nigerian Communications Commission (NCC).

Globacom Limited and 9mobile, despite not being publicly traded companies, do not have accessible public data revealing their financial losses; however, they too have experienced setbacks in this area.

Every one of the four Mobile Network Operators (MNOs) has experienced immense losses, leading to degraded Quality of Service (QoS). As a result, customers complain about subpar service quality and diminishing data availability due to intermittent networks with weak signals, particularly in certain regions across the nation. The operators seem powerless in addressing these issues.

Operators frequently face destruction caused by petty criminals. They also encounter authoritative overreach from specific groups of government employees who use harsh laws to pursue operators for RoW charges and unlawful taxes that lack legal backing. Operators must navigate through these challenges as well. Thus, they find themselves caught between destructive individuals and strict governmental authorities, causing inconvenience for their customers.

In each case, the subscribers endure the unpleasant consequences as they encounter wordplay within the relentless loop involving the divine troublemakers—non-state actors along with organized state and municipal authorities exploiting flawed laws to exploit the operators.

In addition to the regular harassment faced by operators due to vandals and purported unethical government officials in various state and local council regions throughout the nation, there have also been instances of financial losses experienced by these operators as a result of substantial operating costs.

Many have even experienced a loss of millions of subscribers over the past 20 months, resulting in declining revenue as a consequence.

In the initial eight-month period of 2024, Globacom Nigeria saw a substantial decline of 42 million active subscribers, marking a 73% decrease. This shift caused them to drop their position from second to third place in terms of subscriptions.

Although the telecommunications industry in Nigeria remains robust, the decrease in subscribers for Globacom is concerning.

Through introducing per-second billing—a stark contrast to the standard rate of ₤50 per minute—it instantly shook up the market, compelling competitors to revise their pricing structures. If this move marked a turning point for the sector, then in October 2004, Globacom outdid itself yet again with an innovative offer: providing free Subscriber Identity Module (SIM) cards—while contemporaries charged ₤2,000 each for them.

According to an analyst, this move also sent shockwaves through the market due to a fierce pricing battle. Despite entering the market later than competitors, Globacom supported their initiative with substantial advertising efforts, partnering with some of Nigeria’s most prominent celebrities as brand representatives. In 2024, MTN Nigeria announced a post-tax loss totaling N400 billion, indicating a considerable economic downturn.

However, the firm recovered the following week when it reported a post-tax profit of ₦133.7 billion for the first quarter (Q1), which concluded on March 31, 2025, compared to a deficit of ₦392.7 billion recorded during the same period in 2024. MTN disclosed a comprehensive income of ₦1.06 trillion, marking a rise of 40.5% over the ₦752.96 billion earned in Q1 2024.

The telecommunications company listed on the Nigeria Exchange Limited (NGX) announced an investment of N202.4 billion in the first quarter of 2025, marking a 159 percent rise compared to the same period last year. This significant financial commitment was directed towards upgrading and expanding their network infrastructure, which aims at improving both service quality and capability.

Airtel Africa experienced an annual loss amounting to $89 million for the period ending March 2024. The primary cause of this financial setback was attributed to unfavorable currency fluctuations in Nigeria and Malawi. Additionally, revenues at Airtel Nigeria dropped significantly by 40.34%, totaling $738 million in 2024, largely as a result of the depreciation of the Nigerian naira.

Even with a drop in revenue, each Nigerian user saw a 37.2% rise in data consumption, totaling an average of 8.4 gigabytes (GB) per month.

Airtel boasts a subscriber count of 56.6 million, making it the second-largest operator in terms of numbers.

To reduce additional financial losses caused by currency fluctuations, MTN and Airtel decreased their foreign exchange debts.

MTN Nigeria reduced its outstanding letters of credit (LOC) dollar liabilities from $416.6 million at the close of 2023 to $20.8 million by the conclusion of 2024.

Airtel Africa, on its part, repaid $739 million in foreign currency debt over the last year, reducing its foreign currency debt exposure.

Each company feels that decreasing their exposure to foreign currencies is essential for bolstering their financial standing.

With more than 10 million subscribers defecting to rival networks from its initial subscriber base of 13 million, and facing a critical need for a $3 billion loan to remain operational, 9mobile finds itself decidedly in the intensive care unit of the telecom industry.

The dire state of affairs seems nearly irreparable following its early struggles when it navigated around a substantial billion-dollar debt owed to a group of Nigerian financial institutions.

The telecoms firm managed to survive thanks to the support provided by the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN). These institutions granted relief to new proprietors who stepped in. Following this change, the entity shifted its branding from Etisalat to 9mobile amidst numerous assurances. However, these commitments have since proven to be unfulfilled aspirations as the business currently finds itself in a state akin to a coma.

It has now fallen to the bottom of the chart.

The new leadership under Obafemi Banigbe is seeking more than $3 billion in investments to revamp its offerings amid shareholder disagreements. According to a telecommunications industry observer last week, “9Mobile is contending not only with internal conflicts among stakeholders but also with challenges posed by rivals like Glo, particularly concerning its spectrum leasing arrangement with MTN.” The observer further clarified that this leasing deal was structured as an infrastructure-sharing model, allowing 9Mobile access to MTN’s frequency bands where it lacks coverage, and vice versa for MTN.

However, to mitigate the continuous financial losses experienced by service providers, the government agreed to a rate increase of approximately 35% in March 2025, which was significantly lower than the initial proposal of 100%.

In January of this year, the NCC approved the petition submitted by telecommunications companies seeking revisions to their pricing structures within the sector.

It declared a 50 percent hike in telecommunications rates.

However, the Nigeria Labour Congress (NLC) opposed this move and directed its demonstrations towards the Office of the National Security Adviser (ONSA). Consequently, ONSA organized a tripartite meeting involving their office, labor unions, and industry operators. Following these discussions, the tariff rate was set at 35%.

Under the authority granted to it by Section 108 of the Nigerian Communications Act, 2003 (NCA), which allows for regulation and approval of tariff rates and charges set by telecommunications providers, the NCC has sanctioned adjustments requested by Mobile Network Operators (MNOs). These changes were made in reaction to current economic circumstances within the marketplace.

The modification, limited to a cap of up to 50 percent of present rates, although less than the more than 100 percent initially sought by service providers, was determined considering ongoing sectoral reforms expected to enhance long-term viability. The changes will stay within the boundaries set out in the 2013 NCC Cost Study, with individual petitions subject to review according to the usual procedures established by the commission for such evaluations. This implementation will strictly follow the guidelines outlined in the recent NCC Document on Tariff Streamlining, published in 2024, stated the NCC.

However, will this adjustment have any impact on the multitude of issues within the industry, particularly considering the decreasing purchasing power and overall indifference of subscribers?

Is the NCC planning to reassess the financial stability of the operators amidst an unstable economic climate? The number of unanswered questions far outweighs the solutions currently at hand.

Aragba-Akpore serves as a member of the THISDAY Editorial Board.

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