MTN Nigeria PLC, a telecommunications major, has warned of a potential shutdown if rates are not hiked to accommodate mounting operational expenses.
Karl Toriola, the company’s CEO, delivered the warning during a tour of MTN’s facilities in Ibeju-Lekki, Lagos, with Fellows from the Media Innovation Programme. Toriola stated that the telecommunications business is under tremendous financial hardship, particularly due to rising fuel prices necessary to power base transceiver stations.
“There should be no delusion; if the tariff doesn’t go up, we will shut down,” he said, underscoring the urgency of tariff adjustments to reflect current economic realities.
The CEO stated that MTN, which has invested N2.6 billion in corporate social responsibility, according to its 2023 Sustainability Report, is now functioning on earnings collected over two decades.
However, he emphasized that this is unsustainable. “We must return the industry to profitability,” Toriola stated, noting that the company’s reserves are diminishing.
Earlier this year, telecom carriers announced the first pricing increase in 11 years, citing the necessity to manage growing expenses while maintaining service quality. Without such an increase, they said, the sector’s financial sustainability and service standards will continue to deteriorate.
Toriola also pointed out that MTN, once one of Nigeria’s top corporate taxpayers, has seen its tax contributions decline due to the financial challenges. In the first half of 2024, MTN reported a staggering N519.1 billion loss, largely attributed to foreign exchange losses from the naira’s devaluation and high inflation.
In addition, Toriola revealed that MTN may suspend Unstructured Supplementary Service Data (USSD) banking services due to a N250 billion debt owed by Nigerian banks. ‘We are seeking regulatory approval to halt support for USSD services used for banking transactions unless the debt is resolved and tariffs are adjusted,” he said.
Despite the challenges, Toriola expressed optimism that the new Central Bank of Nigeria Governor, Yemi Cardoso, and the Executive Vice Chairman of the Nigerian Communications Commission, Dr. Aminu Maida, would step in to help resolve the financial crisis.
He concluded by urging swift action from the government and regulators, stressing the critical role the telecom industry plays in supporting Nigeria’s economy.
