Internet Data Consumption Declines After 50% Tariff hike

The Nigerian Communications Commission report has revealed that Internet data consumption in Nigeria declined by 17,647 terabytes between January and April 2025, following the implementation of a new tariff regime that saw the cost of telecommunications services rise significantly.

NCC latest industry statistics stated that, total internet usage dropped from 1,000,930.60 terabytes in January to 983,283.43 terabytes in April, representing a 1.76 per cent decrease over the three-month period.

The decline follows a 50 per cent tariff increase approved by the NCC in February, which pushed the average cost of 1GB of data from N287.50 to N431.25 in response to rising inflation, foreign exchange volatility, and surging energy costs affecting telecom operators.

A month-on-month breakdown of the data shows a sharp drop in usage immediately after the tariff was introduced. In February, internet consumption fell to 893,054.80 terabytes, representing a 10.8 per cent decline from the January figure.

This was followed by a rebound in March, when usage rose to 995,876.10 terabytes, indicating that some consumers may have temporarily adjusted their spending or usage habits.

However, in April, data usage dropped again by 12,592.67 terabytes compared to the previous month, highlighting a persistent strain on consumer affordability despite the temporary March recovery. In tandem with the decline in internet usage, the total number of internet subscribers also fell during the same period.

In January 2025, there were 142,161,409 internet subscribers across various platforms, including mobile GSM, fixed wired networks, ISPs, and VoIP services. By April, that number had declined to 141,985,207, representing a net loss of 176,202 subscribers over three months.

The biggest decline occurred in February, when the subscriber base dropped by 911,296 to 141,250,113, mirroring the sharp decline in data usage in that month. March saw a partial recovery, with total subscribers rising to 142,053,537, before dipping again in April.

A closer look at the platform-specific figures reveals that mobile GSM subscriptions, which account for the overwhelming majority of internet users in Nigeria, saw a modest reduction from 141.65 million in January to 141.47 million in April.

Fixed wired subscriptions increased slightly during the same period from 14,053 to 17,175, suggesting marginal improvements in fixed broadband adoption. Wired and wireless ISPs maintained a flat figure of 285,702 subscribers throughout the four-month period, showing no net additions.

Meanwhile, VoIP subscriptions grew steadily from 206,067 in January to 210,959 in April. Compared with the same period last year, the trend is even more telling. Internet usage in April 2025 stood at 983,283.43 terabytes, a 28.2 per cent increase from the 766,708.12 terabytes recorded in April 2024.

However, the total number of subscribers has significantly declined year-on-year. In April 2024, Nigeria had 164,555,776 internet users. By April 2025, that number had dropped by 22.57 million to 141,985,207, representing a 13.7 per cent decrease.

This decline has been largely attributed to disconnections of SIM cards not linked to the National Identification Number, as well as an industry audit done last year.

According to the report, Nigerians are expected to face increased costs for telecom services after the President’s approval of the Nigeria Tax Bill 2024, which reintroduces a controversial 5 per cent excise duty on telecom services. The bill, passed by the Senate on May 8, 2025, will see mobile calls, text messages, and data services becoming more expensive for consumers.

This new tax, alongside recent tariff hikes, has raised concerns within the telecom sector, with operators warning that the move will burden consumers and hamper the country’s efforts to broaden digital inclusion. The excise duty was first introduced in the Finance Act of 2020 under former President Muhammadu Buhari.

It was part of an effort to expand the scope of excise taxes, but telecom operators and consumer groups strongly opposed it. They argued that the tax would add to the already high cost of essential services in a struggling economy.

In response to these concerns, President Bola Tinubu suspended the tax in July 2023, citing its potential to worsen inflation and restrict access to digital services. However, the excise duty is now set to return as part of a broader tax reform initiative, as the Senate passed the bill in May 2025.

The bill mandates that both domestic and international telecom providers offering services in Nigeria collect and remit the 5 per cent tax, which will ultimately be passed on to consumers.

A recent document from the Federal Inland Revenue Service highlighting key elements of the bills read, “The Bill introduces a surcharge on telecommunications services, gaming, and lottery.” The telecom industry, already facing increasing operational costs, has expressed serious reservations about the excise duty.

According to the Association of Licensed Telecom Operators of Nigeria, operators already pay 54 different taxes, including VAT, spectrum fees, and various levies.

The reintroduction of the excise duty, they argue, will place further strain on the sector, potentially stifling recovery efforts in an industry only just beginning to bounce back from the effects of currency devaluation and inflation.

MTN Nigeria reported a N133.7bn ($83.1m) profit after tax in Q1 2025, reversing a N392.7bn ($244.06m) loss in 2024. The company attributed its strong performance to rising data demand, strategic investments, and the recent tariff hike.

Also, MTN Nigeria’s data revenue overtook voice earnings in the first quarter of 2025, rising to N529.4bn, a 51.5 per cent increase from N349.5bn recorded in Q1 2024. The telecom operator’s voice revenue for the same period stood at N407.4bn, highlighting the growing shift in consumer preference towards internet-based services.

The company’s unaudited results showed that data now accounts for the largest share of MTN’s service revenue, which reached N1.05trn in Q1, up 40.5 per cent year-on-year. Compared to the previous quarter, data earnings jumped 17 per cent, while voice rose by 15.5 per cent.

Part of the report stated, “Data revenue rose by 51.5 per cent, driven by active user base growth and higher data consumption. This benefited from some further support from the price adjustments and our ongoing network investments to enhance service quality. Data traffic increased by 46.4 per cent, while average usage per subscriber grew by 29.5 per cent to 12.8GB.”

The company added approximately four million smartphones to its network during the quarter, pushing smartphone penetration to 60.7 per cent. It said the growth underscores rising demand for high-speed data services.