The telecommunications industry in Nigeria has experienced significant growth over the past two decades, positioning itself as a key driver of economic development and digital transformation.
However, the complex and dynamic nature of this industry necessitates a balance between compliance with regulations and fostering innovation. e governance has emerged as a critical tool in achieving this balance, enabling telecom companies to navigate regulatory landscapes while driving innovative solutions.
Landscape
Nigeria’s telecoms sector is characterised by rapid technological advancements, increasing subscriber bases, and the proliferation of mobile and internet services.
The industry contributes significantly to Nigeria’s GDP, with over 220 million subscribers and a growing demand for broadband connectivity.
However, it faces challenges such as regulatory compliance, infrastructure deficiencies, competition and market pressures. Strict adherence to the Nigerian Communications Commission (NCC) guidelines, cybersecurity laws, and data protection regulations is essential but can be cumbersome.
Limited power supply and insufficient network infrastructure hinder innovation, while the need for cost-efficiency often conflicts with the pursuit of cuttingedge technologies.
Corporate governance
Corporate governance encompasses a set of rules, practices, and processes that direct and control a company. In the telecoms sector, good governance ensures that businesses operate ethically, comply with regulations, and maintain transparency.
This is crucial in an industry that operates under intense scrutiny from regulators and the public. By establishing strong ethical standards, telecom companies can build trust with customers and stakeholders, fostering an environment where innovation can thrive.
The industry faces various risks, including fraud, cybersecurity threats, and operational inefficiencies. A robust corporate governance framework enhances risk management processes, allowing organisations to identify and mitigate risks effectively.
As telecoms adopt innovative technologies such as 5G, IoT, and AI, a strong governance structure ensures that these innovations are implemented responsibly and sustainably, balancing growth and risk.
Corporate governance plays a pivotal role in addressing these challenges by ensuring ethical business practices, accountability, and alignment with strategic goals.
The NCC Executive Vice-Chairman and Chief Executive Officer (EVC/ CEO), Aminu Maida, had harped on the significance of corporate governance in organisations, affirming that the concept remains the foundation for success, sustainability of the telecoms industry in Nigeria.
He also disclosed that the Commission was about releasing its revised corporate governance code by updating the 2016 version with a key focus on the introduction of mandatory sustainability reporting for telecoms operators in the country.
Corporate governance refers to the system by which companies are directed and controlled. In Nigeria’s telecoms sector, it can act as a bridge between compliance and innovation through the following mechanisms:
Regulatory adherence
Effective governance ensures that telecoms companies comply with NCC regulations, adhere to financial reporting standards, and protect consumer data.
For instance, establishing compliance committees to oversee regulatory adherence, and training board members and executives on legal and ethical obligations.
A robust governance framework identifies, assesses, and mitigates risks associated with both compliance and innovation. This includes cybersecurity protocols to safeguard consumer data, scenario planning to evaluate potential regulatory changes.
While compliance is essential, governance structures can promote innovation by allocating R&D budgets to explore emerging technologies like 5G and IoT, fostering partnerships with tech startups to co-create solutions, encouraging a culture of innovation through leadership incentives.
Global standards
Maida explained that the initiative aims to align the sector with global Environmental, Social, and Governance (ESG) standards, promoting greater transparency and support sustainable development within Nigeria’s telecoms space.
He also highlighted how sustainability reporting involves organisations to disclose information about their ESG performance.
This practice provides stakeholders—including investors, customers, and regulators—with insights into how telecoms operators manage risks and opportunities related to sustainability.
Key components include reporting on carbon emissions, resource usage, labour practices, community engagement, and data privacy, stated Maida. He further explained essence of sustainability in corporate governance, noting that “such practices are no longer optional but essential for the longterm success of telecoms companies.”
The NCC boss stressed that in the fast-evolving world, corporate governance is not just a regulatory require
ment—it’s the foundation of the telecom industry’s success and sustainability. He declared: “As leaders, it’s our responsibility to ensure our governance frameworks are robust, adaptable, and in tune with the changing global landscape.”
Business success
Underscoring the significance of good governance in the telecoms sector of Nigeria’s economy, Maida as well presented findings from a comprehensive NCC analysis evaluating corporate governance among telecoms operators in Nigeria.
According to him, the major indicators examined in the survey included Board composition, diversity, effectiveness, ethical conduct, compliance, risk management, and corporate social responsibility.
The analysis, Maida stated, indicated a strong correlation between effective governance and regulatory compliance, with companies not excelling in governance facing poor financial performance.
“This observation demonstrates that good governance is not merely a regulatory obligation but a strategic necessity for sustainable business success,” Maida asserted.
Key elements
Besides expatiating on the correlation between effective governance and regulatory compliance in the industry, Dr. Maida further enumerated the essential components shaping the future of corporate governance in the telecoms sector.
According to him, these include adaptability, data privacy and security. He said: “As digital transformation and emerging technologies redefine the landscape, governance frameworks must adapt while ensuring accountability.
“With telecom operators handling vast amounts of sensitive data, robust data protection measures are imperative.”
He also warned that “data breaches could have dire consequences for both individual companies and the sector as a whole.”
He equally stressed the need for “governance frameworks” that prioritise data security through comprehensive policies and compliance protocols in the ecosystem.
According to him, “corporate governance is not just a regulatory organisation; it is the foundation for the success and sustainability of our industry.” The executive vice-chairman as well highlighted the impressive growth of Nigeria’s telecommunications industry since its liberalisation in 2001.
He said: “From just 305,000 active phone lines in 2001, we now boast over 150 million active telecoms subscribers.”
Maida restated the telecoms sector’s significant contributions to the West African country’s Gross Domestic Product (GDP) to include job creation, and economic empowerment for millions of Nigerians.
Stakeholder engagement
Transparent governance facilitates engagement with regulators, consumers, and investors. This alignment helps in advocating for policies that balance compliance with the need for innovation.
Engaging with stakeholders, including investors, customers, regulators, and the communities in which telecoms operate, is vital for sustainable growth.
Companies that practice good governance are more likely to engage in corporate social responsibility (CSR) initiatives, addressing societal issues such as digital divide, education, and health care.
This not only enhances their reputation but also creates a loyal customer base and contributes to long-term profitability.
Several telecom companies in Nigeria have exemplified how corporate governance can drive both compliance and innovation.
MTN’s adherence to NCC standards and investment in 5G technology highlights the dual focus on compliance and innovation. Airtel’s governance framework emphasises customer-centric innovation, such as mobile money services, while ensuring regulatory compliance.
Policymakers and regulators
Policymakers and regulators like the NCC play a crucial role in fostering an environment conducive to compliance and innovation.
Recommendations include streamlining regulations by simplifying regulatory frameworks to reduce bureaucratic hurdles., incentivising innovation by offering tax breaks or grants for R&D investments, as well as encouraging PublicPrivate Partnerships (PPPs) by collaborating with telecom operators to improve infrastructure and digital literacy.
The intersection between corporate governance and innovation in Nigeria’s telecommunications sector presents a unique opportunity for sustainable growth.
By enhancing compliance through effective governance practices, telecom companies can navigate challenges, leverage innovations, and meet the expectations of stakeholders.
As the industry continues to evolve, prioritising corporate governance will be crucial in shaping a responsive and responsible telecommunications landscape that fosters innovation while ensuring regulatory compliance and ethical operations.
This approach will not only enhance the operational environment for telecomirms but also contribute positively to Nigeria’s economic development and digital transformation journey.
Challenges
Despite the benefits of good corporate governance, several barriers hinder its effective implementation in Nigeria’s telecom sector such as resource constraints, regulatory complexity, and cultural factors.
Smaller telecoms firms may lack the resources to develop comprehensive governance frameworks. Navigating the regulatory landscape can be challenging, especially for new entrants. The corporate culture in some organisations may resist changes necessary for improving governance.
Last line
Corporate governance serves as the cornerstone for enhancing compliance and driving innovation in Nigeria’s telecoms sector.
By adopting governance frameworks that integrate risk management, stakeholder engagement, and a forward-thinking approach, telecom operators can remain compliant while pioneering transformative technologies.
