Nigeria Telecoms Sector Projected to See 1.4% Revenue Decline by 2028

The Nigerian telecom industry is facing a challenging future, as a new report from PwC projects a 1.4% decline in average revenue per user (ARPU) by 2028. This decline, highlighted in the February 2025 Global Telecom Outlook (2024–2028), reflects ongoing economic struggles and shifts in consumer spending power. The report paints a mixed picture for Nigeria’s telecom sector, with both significant challenges and some bright spots.

The projected Nigeria telecoms revenue decline is rooted in several factors. One key issue is the sharp drop in ARPU over the past year. For instance, by the third quarter of 2024, ARPU had fallen by 40.87%, dropping to $1.85 from $3.12 in the same period in 2023. This dramatic decrease was largely driven by the devaluation of the naira, which reduced subscribers’ purchasing power and made it harder for telecom operators to maintain profitability. Major players like MTN Nigeria and Airtel Nigeria have already felt the impact, with their ARPU figures plummeting to $2.09 and $1.60, respectively, by late 2024.

Adding to these challenges, the sector experienced a rare drop in subscriber numbers during September 2024, falling by 2.88% to 154.9 million users from 159.5 million in August. This marked the first decline in nearly a year and was attributed to factors such as the mass deactivation of over 42 million SIM cards earlier in February 2024 and a rebasing of the sector later that year.

The Nigerian telecom projected decline in revenue could have serious implications for operators’ ability to invest in infrastructure and maintain profitability. With ARPU continuing to shrink, companies may be forced to compete more aggressively on pricing, potentially further eroding their revenue streams. However, operators like MTN, Airtel, Globacom, and 9mobile are exploring strategies to offset these losses, including leveraging a recent 50% tariff increase.

Despite these hurdles, there are reasons for optimism within the sector. The same PwC report notes that Nigeria’s telecom subscriber base is expected to grow at an impressive compound annual growth rate (CAGR) of 9.8% between 2023 and 2028. This growth is fueled by increasing demand for connectivity and digital services, making Nigeria one of the fastest-growing telecom markets globally. The sector’s overall revenue is also expected to grow at an 8% CAGR during this period.

Recent data underscores this upward trend in subscriber numbers. By January 2025, active subscriptions had surged to 169.3 million from 164.9 million in December 2024—a steady increase over five consecutive months starting from September 2024.

Additionally, fixed broadband subscriptions are projected to grow at a CAGR of 9.2% through 2028, placing Nigeria among top-performing countries like India and Malaysia in this category. Mobile service revenue also reached $7.6 billion in 2024, reflecting strong demand despite economic headwinds.

The Nigerian government has been proactive in addressing connectivity challenges by investing $2 billion into expanding broadband infrastructure across the country. International support has also played a role; for example, the United States recently awarded Nigeria a $2 million grant to bolster its digital infrastructure.

While the Nigeria telecoms revenue decline presents significant challenges for operators, the sector’s rapid subscriber growth and expanding broadband penetration offer hope for sustained development. With strategic investments and innovative solutions, Nigeria’s telecom industry may yet overcome these hurdles and maintain its position as one of the fastest-growing markets globally.

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