Telecom Giants in Nigeria Record N27bn loss as Cable Damage Takes Toll

Telecom Giants in Nigeria Record N27bn loss as Cable Damage Takes Toll

Documents obtained by Bloomberg reveal that Nigeria’s telecom industry faced staggering losses of nearly N27 billion ($23 million) in 2023 due to repairs and revenue losses resulting from damaged cables. MTN Nigeria and Airtel Africa Plc were particularly affected, shouldering a significant portion of the costs.

MTN Nigeria, the largest wireless operator in Africa’s most populous nation, reported over 6,000 cuts on its fiber cable last year alone.

These damages led to substantial service disruptions for customers, with one incident in February resulting in more than five hours of data and voice outages across multiple locations.

To mitigate the vulnerability of its infrastructure, MTN Nigeria invested over N11 billion in relocating 2,500 kilometers of fiber cables between 2022 and 2023, an amount that could have otherwise been utilized to expand coverage in underserved areas.

The Nigerian Communications Commission (NCC), the industry regulator, has acknowledged the pressing issue and expressed willingness to collaborate with stakeholders to address it. Proposed measures include stricter regulations to deter vandalism and enhanced coordination between telecom companies and government agencies overseeing construction activities.

According to projections by the NCC, the telecom sector is poised to contribute more than a fifth of Nigeria’s gross domestic product by the end of 2027, underscoring its pivotal role in the country’s economic landscape.

In response to ongoing grievances from major telecommunications firms, the Nigerian government is taking steps to criminalize the destruction of broadband fiber cables. The Ministry of Works, responsible for overseeing federal road constructors, is reportedly finalizing regulations expected to be signed into law through an executive order by President Bola Tinubu.

The forthcoming regulations aim to impose severe penalties on perpetrators, marking a concerted effort to safeguard critical telecom assets against vandalism and criminal activities.

This move is anticipated to provide much-needed reassurance to investors amid mounting operational challenges, including currency depreciation and energy price hikes, faced by the telecom sector.