Telecom Operators Commits N1.86tn to Network Expansion

Nigeria’s telecommunications operators plan to invest approximately N1.86tn ($1.38bn) in 2026 to expand network infrastructure, increase capacity and improve service quality across the country, even as the power sector continues to struggle with significant commercial losses.

The planned spending, disclosed by the Association of Licensed Telecommunications Operators of Nigeria (ALTON), comes as demand for mobile data, digital payments, video streaming and online services continues to accelerate across Africa’s largest economy.

The investment will be directed toward fibre-optic expansion, network densification, equipment modernisation, last-mile connectivity and capacity upgrades designed to support growing subscriber demand.

According to ALTON, the planned capital expenditure follows an estimated N2.13tn invested by mobile network operators, tower companies and other industry stakeholders in 2025, underscoring the sector’s continued commitment to infrastructure development despite economic headwinds.

Industry analysts say the planned investment represents a positive signal for Nigeria’s digital economy but caution that infrastructure spending alone may not immediately resolve long-standing service quality concerns.

“Infrastructure spending remains critical, but service quality improvements will ultimately depend on execution, operational efficiency, and how quickly operators can address challenges such as fibre cuts, power shortages and network congestion,” said Bayo Akinlade, a Lagos-based telecommunications analyst.

Energy economists also note that the power sector’s commercial losses continue to undermine broader infrastructure development efforts, as unreliable electricity supply increases operating costs for telecom operators that depend heavily on diesel-powered backup systems.

According to analysts, stronger coordination between regulators, infrastructure providers and operators will be necessary to ensure that planned investments translate into measurable improvements in consumer experience.

The announcement comes at a time when consumers continue to report concerns over service quality, months after telecom operators secured regulatory approval for a 50 per cent tariff increase aimed at restoring industry sustainability.

Industry stakeholders argue that sustained investment is necessary to maintain network reliability as Nigeria’s digital economy expands.

Why Telecom Operators Are Increasing Investment

Telecommunications companies face growing pressure to improve service quality amid rapid growth in digital adoption.

Nigeria’s banking sector increasingly relies on digital channels, while e-commerce platforms, fintech companies, streaming services and cloud-based applications continue to drive higher data consumption.

Industry analysts say average data usage per subscriber has increased significantly over the past five years, placing additional pressure on existing network infrastructure.

At the same time, operators must contend with rising operating costs, including foreign exchange volatility, power generation expenses, diesel costs, equipment importation challenges and infrastructure vandalism.

The sector’s investment plans are therefore aimed not only at expanding coverage but also at improving network resilience and reducing congestion across major urban centres.

ALTON noted that operators are increasingly funding network expansion through internally generated revenue rather than relying heavily on foreign capital inflows.

Data from the National Bureau of Statistics showed foreign capital importation into the telecommunications sector declined sharply to $7.24m during the first quarter of 2026 compared with $80.78m recorded in 2025.

Despite this decline, infrastructure investment has continued, highlighting the industry’s shift toward self-funded expansion.

Consumers Continue to Demand Better Service

The investment plans come amid persistent consumer complaints regarding network quality.

Subscribers across major cities have reported slow internet speeds, dropped calls, network outages and transaction failures affecting digital banking and online services.

In response to growing concerns, the Nigerian Communications Commission ordered telecom operators earlier this year to compensate affected subscribers through airtime credits linked to service disruptions.

Operators have attributed many outages to fibre cuts, power disruptions and acts of vandalism affecting critical infrastructure.

Consumer advocacy groups, however, argue that network performance must improve significantly following the tariff adjustments approved in 2025.

What the Investment Means for Nigerians

For millions of Nigerians, the planned infrastructure spending could eventually translate into tangible improvements in connectivity.

Industry experts say expanded fibre networks and upgraded transmission equipment may help improve internet speeds, reduce network congestion and strengthen coverage in underserved areas.

The investments could also accelerate deployment of advanced technologies such as 4G and 5G services, helping businesses and consumers benefit from faster digital connectivity.

Improved network performance would support digital banking, remote work, online education, telemedicine and e-commerce activities that increasingly form part of everyday life.

However, analysts caution that infrastructure spending alone may not immediately solve all service quality challenges.

Factors such as power shortages, equipment theft, fibre vandalism and regulatory bottlenecks continue to affect network performance across the country.

As a result, consumers may experience gradual rather than immediate improvements.

Power Sector Records N310bn Commercial Losses

While telecom operators are increasing investment, Nigeria’s electricity distribution sector continues to battle substantial revenue leakages.

According to commercial performance reports released by the Nigerian Electricity Regulatory Commission (NERC), electricity distribution companies lost approximately N309.73bn during the first quarter of 2026.

The losses were driven by a combination of unbilled energy and revenue collection shortfalls.

The reports showed that distribution companies received electricity valued at N907.28bn during the period but billed only N756.92bn and ultimately collected N597.55bn.

As a result, N150.36bn worth of electricity remained unbilled while an additional N159.37bn in billed revenue was not collected.

Why Electricity DisCos Lost N310bn

Experts say the losses reflect longstanding structural weaknesses within Nigeria’s electricity distribution segment.

Several factors continue to undermine revenue collection, including inadequate metering, electricity theft, meter bypass, weak enforcement mechanisms and billing inefficiencies.

The problem has persisted for years despite repeated regulatory interventions and investments in the sector.

Commercial losses reduce available cash across the electricity value chain, affecting generation companies, transmission operators and distribution firms alike.

Industry stakeholders have consistently identified revenue leakages as one of the biggest obstacles to sustainable power sector development.

Performance Across Distribution Companies

NERC’s report showed significant differences in operational efficiency among distribution companies.

Eko and Ikeja Electricity Distribution Companies recorded some of the strongest commercial performance indicators during the quarter.

Eko DisCo notably achieved a revenue recovery efficiency exceeding 100 per cent in February, reflecting successful recovery of outstanding customer debts.

By contrast, Kaduna Electricity Distribution Company remained among the weakest performers, posting a recovery efficiency of just 41.2 per cent during the same period.

Jos and Yola distribution companies also ranked among the lowest-performing operators across several operational metrics.

The disparities highlight ongoing differences in management effectiveness, customer engagement and operational efficiency across the sector.

Electricity Theft Remains a Major Concern

The Nigerian Independent System Operator recently raised concerns over widespread electricity theft affecting the Ikorodu-Sagamu transmission corridor spanning Lagos and Ogun states.

According to NISO, investigations revealed approximately 180 megawatts of electricity losses resulting from theft and meter manipulation involving large customers connected to distribution networks.

The scale of the losses is significant, representing power volumes comparable to the daily allocation received by some distribution companies.

Officials warn that continued electricity theft threatens grid stability and undermines market revenues needed to support infrastructure investment.

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Telecom Investment Trend

Infrastructure spending within Nigeria’s telecommunications industry has remained relatively resilient despite economic uncertainty.

• 2024: Industry capital expenditure remained below N2tn.
• 2025: Operators invested approximately N2.13tn.
• 2026: Planned investment stands at N1.86tn.

Although slightly lower than the previous year’s spending, the 2026 figure remains historically significant and reflects continued confidence in long-term growth opportunities within Nigeria’s digital economy.

Power Sector Loss Trend

Commercial losses have remained a recurring challenge within Nigeria’s electricity industry.

Industry observers note that while N309.73bn in first-quarter losses is substantial, similar inefficiencies have historically weakened the financial health of distribution companies.

Without significant improvements in metering, collections and anti-theft measures, analysts warn that liquidity pressures could continue to limit investment across the power value chain.

Expert Perspective

Infrastructure and digital economy analysts say the contrasting developments in telecommunications and electricity illustrate the broader challenges facing Nigeria’s infrastructure sectors.

“Investment alone does not automatically translate into improved service delivery,” said a Lagos-based telecommunications analyst.

“Operators must address operational bottlenecks, infrastructure protection and maintenance challenges if consumers are to experience meaningful improvements.”

Energy economists also argue that reducing commercial losses may be one of the most effective ways to strengthen Nigeria’s power sector.

Improved billing efficiency and revenue collection would increase liquidity, support investment and improve overall sector sustainability.

Outlook for Nigeria’s Infrastructure Sector

The latest developments highlight a mixed picture for Nigeria’s infrastructure landscape.

On one hand, telecommunications operators are committing substantial resources to support digital transformation and improve connectivity nationwide.

On the other hand, persistent inefficiencies continue to undermine the financial viability of the electricity sector.

Analysts say both sectors remain critical to Nigeria’s long-term economic growth ambitions.

Sustained investment, stronger regulation, improved operational performance and infrastructure protection will be essential if Nigeria is to achieve its goals for digital inclusion, industrial growth and broader economic development.

For consumers, the outcome of these efforts will ultimately be measured not by investment announcements or regulatory reports, but by the quality and reliability of the services they receive.

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