Telecommunication companies’ operating costs surged by 50.92 per cent in 2023, reflecting the challenges faced by Nigeria’s telecommunications industry in maintaining network operations amid rising inflation and currency depreciation.
According to the most recent Nigerian Communications Commission’s 2023 Year-End Performance Report for the telcos, operating costs climbed from N2.09tn in 2022 to N3.16tn in 2023, signalling increased financial pressures for operators.
However, this rise was accompanied by a notable growth in revenue, which increased by 37.54 per cent to N5.30tn from N3.86tn in the preceding year, driven by a growing demand for voice and data services.
The report read, “This collation was based on the submissions received from responsive service providers in the industry and includes the following matrix as of December 2023;
“i. CAPEX (Domestic Investment): N990,550,661,501.73; “ii. Operating cost: N3,158,403,767,328.48. iii. Revenue: N5,303,539,102,697.93.”
The report highlighted that GSM operators remained the primary contributors to the industry’s financial performance, accounting for N2.52tn in operating costs and N4.01tn in revenue.
The Internet Service Providers segment also reported significant figures, with operating costs reaching N96.81bn and revenue recorded at N89.81bn.
Capital expenditure in the sector rose by 26.06 per cent, with operators investing N990.55bn in 2023 compared to N785.77bn in 2022.
This increase affirms the sector’s commitment to enhancing infrastructure, including deploying 5G networks and expanding broadband services.
The growth in capital investments was reflected in key infrastructure developments.
The number of base stations rose 8.4 per cent to 137,992, while on-land fibre optics deployment reached 83,254.5km.
Towers deployed by operators stood at 39,356, indicating sustained efforts to improve connectivity across the country.
Despite these achievements, broadband penetration slightly declined from 47.36 per cent in 2022 to 43.71 per cent in 2023, due to adjustments in population figures used for calculations.
Nevertheless, active broadband subscriptions increased to 94.76 million, aligning with the national broadband target of 70 per cent penetration by 2025.
The sharp rise in operating costs was attributed to a combination of factors. Energy costs, driven by rising diesel prices and electricity tariffs, exerted significant pressure on the operators, who rely heavily on power to maintain their networks
