MTN Nigeria, the country’s largest telecom operator, has emphasized the urgent need for the telecommunications sector to return to profitability to sustain its operations.
The Chief Executive Officer of MTN, Karl Toriola, made this statement on Monday during a tour of MTN’s facilities by Fellows of the Media Innovation Programme in Ibeju-Lekki, Lagos. With approximately 78 million subscribers, Toriola highlighted that the sector has been accumulating significant losses and that immediate action is necessary to reverse this trend.
According to its 2023 Sustainability Report, MTN is currently surviving on profits accumulated over two decades, with a corporate social investment of N2.6 billion. “We must return the industry to profitability,” he stated, emphasizing the need for reform.
Toriola explained that the company is operating on reserves, a situation he described as unsustainable in the long run. Earlier this year, telecom operators renewed calls for a tariff hike—the first increase in 11 years—to address rising operational costs and improve service quality. Without such adjustments, they warned that financial viability and service standards would continue to decline.
He reiterated the critical pressures from rising operational costs, including escalating diesel prices necessary for powering base transceiver stations. “There should be no delusion; if the tariff doesn’t go up, we will shut down,” he warned, underscoring the urgent need for tariff adjustments to reflect economic realities.
Once one of Nigeria’s top corporate taxpayers, MTN has seen its tax contributions decline due to these financial challenges. In their first-quarter results, both MTN and Airtel have adopted a cautious approach to capital expenditure for 2024.
MTN Nigeria reported a staggering N519.1 billion loss in the first half of the year, primarily due to foreign exchange losses from the naira’s devaluation and high inflation rates. Toriola also warned that the company may suspend Unstructured Supplementary Service Data (USSD) banking services due to a N250 billion debt owed by Nigerian banks. The operator is seeking regulatory approval to halt support for USSD services used for banking transactions unless the debt is resolved and tariffs are adjusted.
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 intervene to help resolve the ongoing financial crisis.
He concluded by stressing the critical role the telecom industry plays in supporting Nigeria’s economy, urging the government and regulators to act quickly to prevent the dire consequences of inaction.
