MTN Nigeria, the country’s largest telecom operator, has highlighted the urgent need for the telecommunications sector to return to profitability in order to sustain its operations.
During a tour of MTN’s facilities by Fellows of the Media Innovation Programme in Ibeju-Lekki, Lagos, CEO Karl Toriola emphasized the substantial losses the sector has been facing and the necessity for immediate action to address this issue.
With approximately 78 million subscribers, Toriola noted that MTN has been relying on profits accumulated over two decades, as indicated by its corporate social investment of N2.6 billion in its 2023 Sustainability Report.
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“We must return the industry to profitability,” he stated, emphasising the necessity for reform.
He further explained that the company is currently relying on its reserves, which he considers unsustainable in the long term.
Earlier this year, telecom operators called for a tariff increase—the first in 11 years—to tackle rising operational costs and enhance service quality.
They argued that without these adjustments, both financial viability and service standards would continue to deteriorate.
Toriola emphasized that the sector is under significant pressure from increasing operational costs, particularly due to the rising prices of diesel needed to power base transceiver stations.
He warned, “There should be no delusion; if the tariff doesn’t go up, we will shut down,” underscoring the urgent need for tariff adjustments to reflect economic realities.
Toriola highlighted that MTN, once among Nigeria’s top corporate taxpayers, has seen its tax contributions decline due to these financial difficulties.
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Reflecting on their first-quarter results, MTN and Airtel have taken a cautious stance on capital expenditure for 2024. Meanwhile, the other mobile operators in the country, 9mobile and Globacom, are not publicly listed.
In 2024, MTN Nigeria reported a significant loss of N519.1 billion in the first half of the year, largely attributed to foreign exchange losses resulting from the naira’s devaluation and high inflation rates.
Additionally, Toriola warned that MTN may suspend its Unstructured Supplementary Service Data (USSD) banking services due to a N250 billion debt owed by Nigerian banks.
The mobile network operator is seeking regulatory approval to halt support for USSD services used for banking transactions unless the debt is settled and tariffs adjusted to align with current economic conditions.
Despite these challenges, Toriola expressed optimism 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 step in to help resolve the ongoing financial crisis.
He concluded by emphasizing the vital role the telecom industry plays in supporting Nigeria’s economy, urging the government and regulators to act swiftly to avoid severe consequences from inaction.