Tizeti's IPO Ambitions Face a Murky Road Paved with Customer Dissatisfaction and Systemic Hurdles
"Unlimited Wi-Fi internet in every region in Nigeria, 300,000m of fibre in 2 states," Kendall Ananyi, the CEO of Tizeti, touted on a LinkedIn post as his company gears up for its IPO.
This audacious claim, meant to inspire confidence, seemed to backfire when the article link was shared on a platform by a mentor. Dozens of people, current and former customers of Tizeti, quickly began writing their reviews. Unfortunately, for a company looking to attract public investment, none of the comments were positive. The online discourse painted a stark picture of a market filled with unsatisfied customers. Comments ranged from complaints about the bad work culture of its engineers and non-existent customer service to delayed installations, scrappy service quality, and almost 40% downtime. I have personally witnessed this abysmal service and had to involve the NCC and FCCPC in a lengthy email exchange before my service was finally restored.
Real Issues of ISPs in Nigeria beyond Tizeti
Despite these significant issues, it's important to acknowledge that while not excusing some of the company's misgivings, Nigerian ISPs face a bigger, systemic problem compared to their counterparts in more developed markets. If you speak to most customers of Tizeti's competing brands, you will most likely hear very similar remarks. Frankly, the challenges with fibre internet in Nigeria are largely an infrastructure problem stemming from government planning, rather than solely the fault of these new providers.
For instance, in the UK and the US, internet service providers were able to significantly leverage pre-existing, extensive telecommunications infrastructure. This included the copper lines used for traditional landlines and the coaxial cables for cable television, networks that had been built out over decades. While these legacy systems were not initially designed with fibre optics for every home, they provided a robust, ubiquitous foundation upon which broadband services could be layered and progressively upgraded. New fibre deployments in these markets often represent an evolution of existing infrastructure, connecting to established poles, conduits, and rights-of-way.
In stark contrast, Nigeria largely lacks this foundational, nationwide telecom infrastructure. This forces providers like Tizeti and other local ISPs to build these critical networks themselves from the ground up – a colossal and capital-intensive undertaking. This significantly inflates operational costs, which often translates to a much higher cost per megabyte for the end-user. According to some reports, while mobile data in Nigeria can be relatively cheap at around $0.39 per gigabyte, fixed broadband costs can still be substantial for many households. Beyond the financial burden, ISPs here also contend with immense logistical hurdles. Securing Right-of-Way (RoW) permits is a major obstacle, often riddled with bureaucratic delays and inconsistent, exorbitant fees across different states. This bottleneck alone can delay or outright abandon infrastructure projects.
Furthermore, security remains a critical concern. Vandalism and theft of telecom equipment, often by unofficial "rent seekers" and hoodlums, are rampant. It's a common sight to see fibre cables from different ISPs precariously hanging on power poles, sometimes broken due to a truck running into them, or cut into pieces by lawnmowers, or damaged by excavation work directly impacting underground lines. In 2023 alone, over 50,000 incidents of cable cuts were recorded, with about 30,000 linked to road construction. These disruptions not only lead to downtime for customers but also drive up operational costs due to constant repairs and replacements. Power supply instability is another massive headache, compelling providers to invest heavily in alternative power sources like generators and solar panels, adding further to their expenses.
These are just some of the multifaceted factors that make operating as an ISP incredibly challenging in a market like Nigeria. The current national fibre backbone stands at around 35,000 km, a stark contrast to the vast needs of a population estimated at over 220 million, with internet penetration around 45.5% at the start of 2024.
The Future of ISPs in Nigeria: A Tumultuous Road Ahead
The Nigerian ISP landscape is undergoing significant shifts, with both daunting challenges and emerging opportunities:
Government Intervention and Broadband Targets: The Nigerian government, through the National Broadband Plan 2020-2025, aimed for 70% broadband penetration by the end of 2025. As of May 2025, broadband penetration stood at approximately 47.73%. While this target seems increasingly unrealistic, there are concerted efforts to bridge the gap. The government, with support from development partners like the World Bank ($700 million funding injection), is planning to deploy an additional 90,000 km of fibre optic cable from Q4 2025. This ambitious project aims to expand the country's fibre backbone from 35,000 km to 125,000 km and potentially reduce internet costs by over 60%. This initiative, structured as a Public-Private Partnership (PPP), is crucial for enabling deeper penetration.
Competition from Mobile Network Operators (MNOs): While smaller ISPs like Tizeti are focused on fixed broadband, the major MNOs (MTN, Airtel, Globacom, 9mobile) dominate the overall internet market. They collectively boast over 132 million subscribers (as of Q3 2024 for mobile internet), significantly overshadowing the roughly 262,206 subscribers served by the 106 active smaller ISPs. MNOs are increasingly deploying their own Fibre-to-the-Home (FTTH) solutions, leveraging their existing large-scale infrastructure and market dominance. This creates intense competition, sometimes leading to "predatory pricing" that small and mid-tier ISPs struggle to match.
The Starlink Disruptor: SpaceX's Starlink has rapidly emerged as a significant player since its launch in 2023. By the end of 2024, Starlink became Nigeria's second-largest ISP, with 65,564 subscribers, surpassing many traditional fibre providers. Its appeal lies in its ability to offer high-speed connectivity (up to 250 Mbps) in remote and underserved areas where terrestrial infrastructure is non-existent or unreliable, bypassing the typical RoW and last-mile challenges. While its pricing remains premium and it faces regulatory hurdles and capacity issues in major urban centres (leading to temporary sell-outs in Q4 2024/Q1 2025), Starlink's growth underscores the immense demand for reliable internet, and its satellite-based approach offers a genuine alternative that could pressure traditional ISPs to innovate or collaborate.
Consolidation and Survival: The ISP market is fragmented, with many smaller operators struggling with steep operating costs (energy costs up 250% in the past year, CapEx up 200% due to forex). This pressure is leading to a shrinking number of operational ISPs, with 12 companies failing to renew their licenses recently. Experts predict that many small-holders will "fizzle out," while mid-sized players might consider mergers to survive the "onslaught of predatory pricing" from MNOs. Regulatory environments that encourage mergers and provide protection could be vital.
Investment and Innovation: Despite the challenges, the sheer size of Nigeria's market and its growing digital economy potential continue to attract investment. The Minister of Communications, Innovation and Digital Economy recently announced that Nigeria expects to receive $3 billion in telecom equipment and fibre optic infrastructure by June 2025 from partnerships with the World Bank and others. This investment, alongside initiatives like the National Broadband Alliance for Nigeria (NBAN), aimed at aggregating demand from key sectors, seeks to boost broadband penetration and reduce costs. Innovations like community Wi-Fi networks and solar-powered hubs are also crucial for bridging the digital divide, particularly in rural areas.
Now, back to the issues at Tizeti: will more capital solve the situation or make it worse? An IPO could inject much-needed funds to expand infrastructure, improve technology, and potentially enhance customer service by increasing staff and training. However, if the underlying issues of operational efficiency, customer focus, and navigating Nigeria's unique infrastructural and regulatory landscape are not fundamentally addressed, more capital might simply amplify existing problems, leading to greater disillusionment from both customers and new investors.
The future of ISPs in Nigeria hinges on a delicate balance between ambitious government plans, substantial private investment, effective regulation, and, perhaps most importantly, a genuine commitment from providers to overcome their systemic hurdles and deliver consistent, quality service to a demanding populace.