Nigeria’s telecom industry is grappling with mounting operational costs, spending over $350m annually on diesel-powered generators.
According to the State of Africa’s Infrastructure Report 2025 by the Africa Finance Corporation, telecom operators in Nigeria consume more than 40 million litres of diesel every month.
This growing reliance on diesel generators adds significant financial pressure on telecom operators, particularly in rural and underserved areas.
The report stated, “A growing number of tower sites going off-grid or relying on diesel generators is a cause of concern for several reasons. First, it increases CAPEX and OPEX costs for operators, making investments in rural and remote areas even more prohibitive.
“In fact, GSMA Intelligence estimates that the energy cost of a mobile base station in rural areas could be 37 per cent more than in urban areas. In Nigeria, for instance, telecom operators consume over 40 million litres of diesel per month, representing a yearly spending of over $350m.
“Mobile broadband costs are further exacerbated by the higher amount of energy required to power data traffic in Africa (0.24 kWh/GB compared to a global average of 0.17 kWh/GB), where lower traffic volumes and use of older technologies like 3G are energy inefficient.
Second, tower sites that rely on generators and batteries report frequent theft of battery equipment and diesel.”
Nigeria’s energy sector faces significant challenges, with millions of households and businesses relying on petrol and diesel generators due to unreliable public supply.
The report noted, “Unreliable public supply has pushed millions of households and firms to rely on petrol and diesel generators,” highlighting the gap between Nigeria’s energy demand and the capacity of its power grid.
The report also pointed out the need for substantial investment in grid infrastructure and alternative energy sources to ensure energy security. As the country works to bridge the energy gap, the report also touches on Africa’s digital infrastructure challenges.
“Nigeria, Egypt, and Kenya are emerging as hubs—but an estimated $7bn in annual investment is needed to close the data infrastructure gap continent-wide,” it noted.
According to the report, Nigeria is developing an ambitious plan to expand its fibre network, using a public-private partnership model to improve broadband quality.
The report read, “Nigeria, for instance, already relies on a backbone network of 35,000km but is rolling out an ambitious plan for an additional 90,000km of fibre under a PPP model to deliver a more modern and efficient backbone, able to support the latest technologies and bandwidth.”
Despite this, the report pointed out that Nigeria still faces challenges in expanding internet access, especially in rural areas.
An analysis by The PUNCH last September showed that telcos spent approximately N71.3bn every month on diesel, amounting to a total expenditure of N570bn over the eight months from January to August.
As of May 2024, Airtel’s Director of Corporate Communications and Corporate Social Responsibility, Femi Adeniran, stated in Lagos that the company’s monthly diesel expenditure stood at N28bn.
As companies strive to align with the United Nations’ Sustainable Development Goals, reducing their carbon footprint has become a priority. Telecom firms are now compelled to seek efficient, cost-effective energy solutions.
The Chief Technical Officer of Airtel Nigeria, Harmanpreet Dhillon, said the operator is focused on expanding grid connectivity and deploying alternative energy solutions across its operations in Nigeria.
“The most important factor for us here in Nigeria is the grid,” Dhillon stated. “Our first goal is to connect all of our sites to the grid, as many of our base stations currently lack grid connectivity. Once we achieve this, we’ll reduce our reliance on generators, which in turn will cut down our diesel consumption.”
