MTN Nigeria, the nation’s largest telecommunications operator, has sounded an alarm on the unsustainability of its operations without a much-needed tariff hike.
Karl Toriola, the Chief Executive Officer of MTN Nigeria, made this stark revelation during a tour of the company’s facilities by Media Innovation Programme Fellows in Ibeju-Lekki, Lagos.
With about 78 million subscribers, Toriola highlighted that the telecom sector is grappling with significant financial challenges, including rising operational costs and the devaluation of the naira.
MTN is currently operating on accumulated reserves, a practice Toriola deemed unsustainable in the long term. The company recorded a loss of N519.1 billion in the first half of 2024, primarily due to foreign exchange losses and high inflation rates.
Toriola warned that if tariff adjustments are not implemented, MTN may have no choice but to shut down operations. “There should be no delusion; if the tariff doesn’t go up, we will shut down,” he stated, pointing to the urgent need for reform in the telecommunications industry.
The sector’s financial strain is compounded by escalating diesel prices needed to power base stations. Earlier in the year, telecom operators, including MTN, renewed their calls for a tariff hike to offset these costs.
This would mark the first tariff increase in 11 years, aimed at improving both service quality and financial viability.
Additionally, MTN may suspend Unstructured Supplementary Service Data (USSD) banking services due to a N250 billion debt owed by Nigerian banks.
Toriola expressed hope that interventions from the new Central Bank Governor, Yemi Cardoso, and the Nigerian Communications Commission could help resolve the crisis.
MTN, once a top corporate taxpayer in Nigeria, has seen its contributions dwindle due to these ongoing financial difficulties.
Toriola concluded by urging the government and regulators to act swiftly to prevent further decline in the telecommunications industry, which he underscored as vital to the Nigerian economy.
