The Nigerian Communications Commission (NCC) is developing an incentive-based spectrum investment framework to encourage telecommunications operators to increase investment in network expansion in exchange for spectrum-related incentives.
The proposed Incentive-Based Spectrum Investment Framework (IBSIF) is expected to link the value of spectrum allocated to operators with measurable investments in network coverage, capacity and service quality.
The initiative comes amid rising spectrum costs and growing demand for broadband services, with the commission saying the cost of spectrum has increased by about three to four times since 2016.
Umar Abdullahi, Special Adviser (Technical) to the Executive Vice-Chairman of the NCC and a member of the IBSIF committee, disclosed this during a media briefing on the proposed framework.
Abdullahi said monthly data consumption in Nigeria had risen from about 517,670 terabytes in January 2023 to 1.73 million terabytes in September 2026, representing more than a threefold increase.
He said demand would continue to grow as the use of artificial intelligence, cloud computing, digital government services, banking and streaming expanded.
“Yesterday’s challenge was about connecting people. Now it’s about powering the country. It’s about services and industry,” he said.
According to figures presented by the commission, Nigeria currently has about 82 per cent 4G population coverage, while 5G coverage stands at approximately 13 per cent.
Abdullahi said telecommunications operators invested more than $1 billion in capital expenditure last year and deployed almost 3,000 new sites.
He added that about 8,000 sites had been deployed so far this year, with operators targeting approximately 12,000 new sites.
However, he said the investments had not eliminated complaints about poor network services because the additional capacity was quickly absorbed by rising demand.
He identified the increasing cost of spectrum as another challenge, explaining that funds spent by operators to acquire spectrum could otherwise be channelled into expanding their networks.
“The spectrum costs have gone up about three to four times from 2016 to now. When you compare that with the revenues, it is even more glaring,” he said.
Under the proposed IBSIF, operators would not simply acquire spectrum and continue with their existing operations. Instead, the NCC is considering tying spectrum-related incentives to additional and verifiable investments in areas such as network coverage, capacity and service quality.
Abdullahi said the obligations could include extending coverage to specified underserved locations or increasing 5G deployment, depending on the final design of the framework.
He explained that the proposal would complement, rather than replace, existing network rollout obligations attached to operators’ licences.
The framework could particularly target peri-urban, peri-rural and semi-rural communities, where commercial deployment may be difficult but additional connectivity could support economic activities.
“It’s not just take spectrum, pay XYZ, and business as usual. There has to be a connection between the spectrum that you’re taking and the investment that you’re making,” he said.
How the Framework Will Work
Abdullahi said investment commitments under the proposed framework would be subjected to technical and financial verification to ensure operators fulfilled their obligations.
He said network performance would be assessed using objective indicators, including crowdsourced quality-of-experience data.
The commission is also considering wider infrastructure investment opportunities under the framework, including the deployment of telecommunications towers, fibre and other network facilities.
According to him, the IBSIF would be implemented in phases and would remain subject to applicable regulatory and approval processes.
He said the proposal was intended to encourage investment in communities that were not entirely commercially unviable but remained difficult for operators to justify based solely on immediate financial returns.
He distinguished such locations from areas considered completely commercially unviable, which would continue to be addressed through the Universal Service Provision Fund.
Abdullahi said the framework could also support investment in critical sectors such as education and healthcare.
He cited Brazil’s 5G spectrum model, which included connectivity obligations for schools and hospitals, as an example of how spectrum allocation could be linked to wider social and economic objectives.
He said the need for additional investment was particularly evident in Nigeria’s 5G rollout, with coverage remaining at about 13 to 14 per cent, compared with 4G population coverage of approximately 82 per cent.
Abdullahi said Nigeria had significant room to expand next-generation connectivity, comparing its progress with countries such as India and Brazil, which launched 5G services around a similar period.
He explained that Nigeria was a mobile-first market, unlike countries where fixed broadband and fibre infrastructure had historically provided the foundation for internet access.
“Mobile is the primary means by which most people communicate,” he said.
According to him, many households and businesses depend on smartphones, MiFi devices and mobile broadband for banking, education, entertainment, business and other services.
Also speaking, Lawrence Abang, Chairman of the IBSIF committee and Head of Dispute and Litigation at the NCC, said the initiative was designed to accelerate broadband expansion and communications infrastructure in underserved and congested markets.
He said the commission would first issue a consultation paper and engage stakeholders before finalising the framework.
The proposal forms part of wider efforts by the Federal Government and the NCC to improve the investment environment for telecommunications operators.
The commission has also been pushing state governments to waive right-of-way charges, with 13 states having reduced the charges for fibre deployment to zero.
Abdullahi said the NCC was pursuing the spectrum investment framework as one of several measures to encourage network expansion, noting that although fibre infrastructure remained critical to broadband development, it would take time to scale sufficiently.
He said the ultimate objective was to expand network coverage, reduce congestion and improve the quality of telecommunications services while ensuring that spectrum generated wider economic value.
