MTN Nigeria, the country’s largest telecom operator, has issued a stark warning regarding the urgent need for profitability in the telecommunications sector. Chief Executive Officer Karl Toriola made this assertion during a recent tour of MTN’s facilities in Ibeju-Lekki, Lagos, where he hosted Fellows of the Media Innovation Programme. Toriola emphasized that the sector has been grappling with significant losses and immediate action is critical to reverse this trend.
With approximately 78 million subscribers, Toriola highlighted the challenges MTN faces. “We must return the industry to profitability,” he stated, underlining the necessity for reform in the sector. He revealed that the company is currently surviving on profits accumulated over the last two decades, which he described as unsustainable in the long term.
Earlier this year, telecom operators across Nigeria renewed calls for a tariff increase—the first in 11 years. Toriola noted that this hike is essential to address rising operational costs and improve service quality. “Without such adjustments, financial viability and service standards will continue to decline,” he warned.
The CEO pointed out critical pressures from escalating operational costs, particularly the rising prices of diesel needed to power base transceiver stations. “There should be no delusion; if the tariff doesn’t go up, we will shut down,” he asserted, reflecting the urgency of the situation. He added that MTN, once a top corporate taxpayer in Nigeria, has seen its tax contributions decline due to these financial challenges.
In a concerning report, MTN revealed a staggering N519.1 billion loss in the first half of 2024, primarily driven by foreign exchange losses from the naira’s devaluation and high inflation rates. “This financial strain is unprecedented,” Toriola remarked, reinforcing the need for immediate corrective measures.
Additionally, Toriola expressed concerns about the potential suspension of Unstructured Supplementary Service Data (USSD) banking services due to a N250 billion debt owed by Nigerian banks. He stated that MTN is seeking regulatory approval to halt support for USSD services used in banking transactions unless this debt is resolved and tariffs adjusted accordingly.
Despite these challenges, Toriola remains optimistic about the future. He expressed hope that the new Governor of the Central Bank of Nigeria, Yemi Cardoso, and the Executive Vice Chairman of the Nigerian Communications Commission, Dr. Aminu Maida, would intervene to help alleviate the ongoing financial crisis.
Concluding his remarks, Toriola stressed the critical role of the telecom industry in supporting Nigeria’s economy. He urged the government and regulatory bodies to act swiftly to prevent dire consequences stemming from inaction. “The time for decisive action is now,” he concluded, calling for collaborative efforts to restore the sector’s stability.
