The Chief Executive Officer of Tizeti, a fixed wireless broadband provider, Kendall Ananyi, says capacity costs outside Lagos could be up to 30 times higher than within the commercial capital, placing a strain on internet service providers striving to extend coverage to rural and underserved communities.
Ananyi, who also co-founded the internet company, raised this concern over the steep cost of backhaul infrastructure beyond Nigeria’s major urban centres, describing it as a significant barrier to nationwide internet accessibility.
“Affordability and access to backhaul, specifically cheap backhaul, are our biggest concerns,” Ananyi said in an interview with CNBC. “Capacity costs in Lagos compared to areas outside Lagos can be 20 to 30 times higher, yet we’re expected to maintain similar pricing for customers in both regions.”
He explained that such cost disparities are discouraging for ISPs seeking to expand beyond cities like Lagos, Abuja, and Port Harcourt, where infrastructure is relatively advanced and easier to access.
Beyond the high cost of backhaul, industry experts say the financial burden of deploying internet infrastructure in rural Nigeria is a major disincentive to investment.
Rolling out fibre optic cables and cell towers in remote regions comes with significantly higher installation and maintenance costs, yet the potential revenue, measured by Average Revenue Per User, is considerably lower due to limited household incomes.
The Ericsson Mobility Report noted that “the cost implications of deploying and maintaining infrastructure in these areas often outweigh the potential revenue generation, presenting a formidable financial obstacle to delivering widespread coverage.”
Rural areas also frequently suffer from unreliable or non-existent electricity supply, complicating the operation and upkeep of network equipment and increasing operational costs.
“Laying fibre or setting up cell towers in remote areas is expensive, with limited short-term returns,” a telecom industry analyst, Olalekan Alimi, wrote on LinkedIn.
“Rural areas face electricity shortages, making network maintenance difficult. Telecom companies see lower spending power in rural communities as a financial risk. Bureaucracy and unclear policies also slow down rural expansion initiatives.”
Founder of Jidaw Systems Limited, Jide Awe, argued that simplifying licensing and regulatory frameworks, along with deliberate investments in digital infrastructure, are essential to encouraging ISPs to look beyond Nigeria’s urban clusters.
Despite these constraints, Tizeti has pressed ahead with expansion, entering over ten additional states in the last two years. The firm currently operates in around 15 states across Nigeria, including Ogun, Benin, and Oyo.
“While backhaul remains expensive, we’re optimistic that infrastructure projects currently in the pipeline will come online soon,” Ananyi said.
“Once those investments materialise, operational costs should decline, paving the way for more affordable backhaul options. This, in turn, will enable us to lower prices for customers in underserved areas and improve access to our services.”
Established in January 2017, Tizeti offers unlimited high-speed internet services to homes and small businesses in Nigeria and Ghana under the brand names Wifi.com.ng and GhanaWifi.com. The company is also making inroads into Francophone West Africa, including Côte d’Ivoire.