Nigeria’s digital economy witnessed one of its most dramatic growth surges in 2024 as the Value-Added Services (VAS) segment recorded an unprecedented 470.74 percent jump in revenue, according to the newly released 2024 Year-End Performance Report of the Nigerian Communications Commission (NCC).
The spike marks the strongest performance of any non-core telecom segment, underscoring a major shift in consumer behaviour as millions increasingly rely on digital lifestyle services spanning entertainment, education, content streaming, caller ringback tunes, fintech-driven alerts, authentication services, and enterprise messaging.
The report shows that VAS revenue skyrocketed from N14.57 billion in 2023 to N83.09 billion in 2024, driven by aggressive service diversification, wider adoption of enterprise messaging, and the explosion of digital entertainment consumption.
Jide Awe, an industry analyst, said the surge represents Nigeria’s clearest sign yet of how mobile subscribers are shifting from traditional telecom usage to service-led digital ecosystems that enhance personal productivity and entertainment.
This growth stands in sharp contrast to the decline witnessed in core segments such as voice and SMS. While the industry grappled with a 26.61 percent drop in active voice subscriptions, falling from 224.7 million to 164.9 million due to the nationwide NIN-SIM enforcement drive, VAS services expanded their footprint across all major networks, proving resilient despite subscriber churn.
The NCC report attributes the VAS rise partly to a more engaged and digitally active user base, even as the total number of mobile lines reduced.
Subscriber numbers within the VAS segment also rose modestly, posting a 25.02 percent increase year-on-year. Though significantly lower than the revenue spike, the subscriber expansion demonstrates that consumers who remained active on the networks are spending more on digital services than ever before. Operators leveraged a combination of targeted promotions, richer content offerings, and seamless onboarding processes to boost uptake.
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Awe, in an interview with BusinessDay, points to several factors behind the extraordinary revenue leap. “First is the maturation of Nigeria’s digital payments and fintech infrastructure, which has made microtransactions for services such as alerts, digital micro-learning programmes, games, and subscription-based content far easier to complete. Second is the aggressive push by mobile operators and third-party service providers to monetise digital engagement through innovative packages tied to music, videos, short learning modules, sports updates, religious content, and gaming.”
Additionally, enterprise VAS, especially bulk messaging, verification services and transaction alerts, soared as banks, fintechs, logistics firms, and e-commerce platforms expanded their digital footprints. Corporate demand for SMS-based One-Time Passwords (OTPs), authentication, and customer communication also rose sharply as more Nigerians adopted digital financial services.
While national SMS traffic declined by 10.43 percent during the year, the rise in enterprise SMS, especially those tied to VAS platforms, helped offset some of the losses. The report shows that total national SMS volume fell from 22.97 billion in 2023 to 20.57 billion in 2024, but international SMS grew by 16.13%, partly due to service providers integrating VAS bundles that require cross-border communication.
The overall shift toward data-driven services also contributed to the VAS boom. Nigeria’s data usage surged by 34.26 percent, hitting 9.76 million terabytes in 2024. With more Nigerians engaging in online content consumption, VAS providers tapped into this momentum by introducing hybrid offerings that blend mobile data with entertainment or learning services, creating new revenue lines that were previously underdeveloped.
Segments outside the major operators contributed to the VAS momentum. Independent content creators, local developers, and aggregators found new opportunities as VAS offerings integrated more indigenous content, from Nollywood clips to local-language podcasts and religious programmes.
However, the strong VAS performance comes amid an otherwise turbulent year for the telecom industry. Operators faced soaring operating costs, up 85 percent, due to inflation and the impact of forex unification on imported network equipment. Capital expenditure also spiked by 159 percent to N2.9 trillion as operators invested heavily in network expansion, fibre deployment and data-centre capacity, all of which indirectly supported the environment in which VAS services thrive.
Despite these challenges, the industry’s ability to generate N83.09 billion in VAS revenue signals a profound shift in Nigeria’s digital consumption habits.
Awe predicts the trend will likely intensify in 2025 as telecom operators deepen their partnerships with fintechs, EdTech platforms, entertainment startups, and enterprise service providers seeking to deliver more personalised, subscription-based digital experiences.
The NCC report suggests that as traditional revenue sources like voice and SMS continue to weaken, VAS will become a critical engine for industry growth. With consumers demanding richer, more immersive digital experiences, operators are positioning VAS not merely as add-ons but as central pillars of Nigeria’s emerging digital lifestyle economy.
If the 2024 surge is any indication, Nigeria’s VAS market is on the cusp of becoming one of the most dynamic segments of the telecom value chain, reshaping how subscribers interact with their mobile networks and accelerating the country’s transition into a fully digital society.
