Investor Confidence Returns as Telecom Sector Clears N300bn Debt Overhang

Investor appetite for Nigeria’s telecommunications sector is gradually rebounding following the resolution of a N300 billion Unstructured Supplementary Service Data( USSD) debt impasse that had weighed heavily on operator balance sheets and rattled confidence across the broader digital ecosystem.

Industry leaders say the clearing of the long-running debt dispute between telecom operators and financial institutions has removed one of the most significant financial overhangs in recent years, restoring predictability to a sector already grappling with forex volatility, rising energy costs and over a decade of static pricing.

Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), at a stakeholders’ forum in Lagos, described the debt resolution as a turning point.

“At its peak, the exposure was approaching N300 billion. That level of unresolved liability created uncertainty not just for telecom operators, but for the financial services ecosystem that depends on us. Today, that overhang has been lifted. There is no outstanding USSD debt,” he said.

The dispute, which lingered for years, stemmed from unpaid charges for USSD services used by banks to power mobile banking transactions. The standoff strained relationships between operators and financial institutions, raised concerns among lenders, and complicated capital planning for network expansion.

According to Adebayo, structured engagements involving regulators and industry stakeholders led to a migration to end-user billing, a shift he said has brought clarity and long-term sustainability to the framework.

“Resolution was not accidental. It required coordination, regulatory firmness and commercial realism. With end-user billing in place, the framework is now cleaner and far more sustainable,” he noted.

Market observers say the debt clearance has coincided with improved foreign exchange liquidity, easing pressure on operators who earn revenue in naira but settle many of their obligations from bandwidth to software licences and network equipment, in foreign currency.

For much of the past three years, forex scarcity had compounded financial stress, forcing operators to accumulate foreign obligations and delay capital expenditure. The resulting strain slowed infrastructure rollouts and raised fears about service quality deterioration.

That pressure has begun to ease.

“Forex stability has improved, and with reduced exposure to legacy debt, operators are better positioned to meet international commitments. When investors see stability in cash flow and policy direction, confidence follows,” Adebayo said.

The renewed optimism comes after regulators approved long-awaited tariff adjustments earlier this year, the first major pricing review in 13 years. Operators had argued that inflation, energy costs and currency depreciation had eroded margins to unsustainable levels, threatening network investment.

While consumer groups initially expressed concern over higher charges, industry executives maintain that the adjustment was necessary to prevent service rationing and long-term infrastructure decline.

“No industry can operate indefinitely below cost. Our responsibility is to ensure affordability, yes, but also sustainability. When networks deteriorate, it is the public that ultimately suffers,” Idris Olorunnimbe, chairman of the Nigerian Communications Commission (NCC) Board, who addressed stakeholders at the same forum.

Olorunnimbe stressed that regulatory independence and policy consistency remain central to sustaining the sector’s recovery.

“Investors respond to clarity. They commit capital where rules are transparent, decisions are data-driven, and the regulatory environment is predictable. That is the environment we are committed to maintaining,” he said.