The Nigerian Communications Commission, (NCC), has attributed its low revenue generation in 2024 to the failure of telecommunications companies to purchase 5G spectrum licences.
The NCC’s Director of Financial Services, Yakubu Gontor, and its Chief Executive Officer/Executive Vice Chairman (CEO/EVC), Aminu Maida, disclosed this on Thursday during the 2025 budget defense before the National Assembly Joint Committee on Communications.
Speaking at the session, Gontor explained that the Commission could not auction the 5G spectrum due to market conditions.
He said the two large operators that already acquired 5G spectrum were underutilising it, while the third-largest operator, whom the NCC had anticipated would purchase the spectrum, decided that it was not the right time for such an investment. Instead, he said it opted to focus on expanding existing business.
According to him, the Commission was operating on very fine margins, with only one slot available for sale and just one potential buyer. He further noted that 9mobile was undergoing a financial restructuring, making it an unsuitable candidate for the purchase at the time.
Gontor also revealed that despite a 50% increase in telecom tariffs, the NCC may not generate significant revenue from spectrum sales in 2025.
He emphasised that the priority for telecom operators this year is improving service quality, and while spectrum is an essential resource, it is currently not their top investment priority.
Despite these challenges, he noted that the introduction of new technologies, including 6G, could generate over $1 billion in revenue for the federal government.
He explained that spectrum sales typically follow a 10-year cycle, similar to leasing land. When a lease is paid for ten years upfront, the revenue from that lease sustains operations for the next nine years.
Presenting the NCC’s 2025 budget, Gontor stated that the Commission projects total revenue of N272.433 billion.
He said the major component of this revenue comes from an operating levy of N205.7 billion and spectrum fees of N49.784 billion, along with other income sources.
Regarding expenditures, he explained that the total recurrent expenditure is projected at N95.668 billion, while capital expenditure is estimated at N10.735 billion.
Additionally, N30.13 billion has been earmarked for special projects. This brings the total projected expenditure, including recurrent, capital, and special projects, to N136.534 billion.
Gontor added that the NCC expects to remit N120.836 billion to the Consolidated Revenue Fund (CRF), while remittances to the Universal Service Provision Fund (USPF) will be determined in 2025.
Providing insight into the 2024 budget performance, CEO Aminu Maida revealed that the NCC generated N195.8 billion, of which N111 billion was remitted to the CRF.
He explained that N137.6 billion was earned from annual operating fees, while N26.4 billion came from spectrum fees, among other revenue sources.
Maida, however, noted that the Commission had initially targeted N292.3 billion in revenue but fell short due to its inability to auction a 5G spectrum slot. He explained that this shortfall also affected the NCC’s remittance to the federal government, as a significant portion of spectrum fees is allocated to the CRF.
Additionally, he pointed out that the 2024 budget assumed a 12.5% cost of collection from the federal government, but this was ultimately not approved.
As a result, the NCC’s actual operating income was only around 20-35% of the projected figure. Due to these challenges, the Commission revised its 2025 revenue forecasts to be more realistic.
Speaking on behalf of the Joint Committee, Senator Aliyu Ikrah Bilbis stated that the NCC’s submission would enable lawmakers to ask critical questions and provide guidance to help improve the Commission’s operations in 2025.
