Nigeria’s Rising Telecom Costs Bite Small Businesses

A roadside gas seller like David Okoawa doesn’t just pump gas, he relies on mobile money transfers, POS transactions, and customer chats to keep his business alive. But since the Nigerian Communications Commission (NCC) approved a 50% tariff increase on calls, SMS, and data in January 2025 the first major adjustment in over a decade, every naira spent on data feels like a direct cut from his daily profit.

“Most people don’t even realize how much this is affecting us, you can’t just raise your prices, because customers will ask, ‘Is it only you this is happening to?” David says.

The recent hike has pushed up basic mobile costs for everyday users. Calls that used to cost around ₦6.40–₦11 per minute now range from ₦9.60 to ₦15.40, while sending an SMS has gone up from ₦4 to about ₦5.60–₦6. Data isn’t spared either, 1GB now costs roughly ₦431.25 or more, with many popular bundles seeing increases of 50–65%.

This comes after years of telecom operators pushing for higher prices, citing rising inflation, the falling value of the naira, and the cost of diesel.
Small entrepreneurs, especially those in the digital economy are hit hardest.

Mercy Ude, who runs a catering business, now pays significantly more to post daily on social media and confirm orders via WhatsApp and Instagram. “I used to spend a little on data every day,” she explains, “but now it feels like I’m paying just to stay visible and connected.”

Abdul Malik, an online clothing seller, faces delays uploading product images when networks lag, costing him sales. POS operators like Onyekachi feels it even tighter, “The POS takes its cut, the bank takes its cut, and then there’s the data. Yesterday, Airtel was down for nearly the whole day. I couldn’t check balances or finish transactions. Customers get impatient. You lose more than money, you lose their loyalty.”

Nigeria is trying to build a cashless, digital economy with POS systems, mobile money, and online shopping, and that depends on affordable internet and phone access. But the recent tariff hikes have created a dilemma, the very tools meant to help people join the digital economy are now more expensive for them to use. Many of these entrepreneurs rely on data for multiple tasks like sending invoices, confirming orders, checking payments, or keeping track of sales.

NCC Executive Vice Chairman, Dr Aminu Maida says that without prices that reflect real costs, networks could not keep up with the huge demand for data. He explained that this restores the market principles that helped Nigeria’s telecom boom and has led to better service in many areas.

For small business owners, however, talk of long-term upgrades does not change today’s reality. Big companies can pass on costs through pricing or VAT, but street level entrepreneurs cannot. “Big companies can adjust,” says David. “For us, every naira counts. We just have to bear it to keep our customers.”

With Nigeria’s internet users nearing 148 million, according to recent NCC figures, the gap between keeping networks running and keeping access affordable is clear. The tariff hike may have fueled investment and prevented network collapse, but it comes at a cost to the small entrepreneurs who drive the grassroots digital economy.

For now, people like David, Mercy, Abdul, and Onyekachi are left asking themselves how much longer they can afford to stay online. They also wonder if the promised improvements in network quality will make the extra expense worth it or if it will slow the very digital growth Nigeria needs.