MTN Nigeria, one of the leading telecom providers, is urging for an upward review of tariffs to restore profitability in the sector. Karl Toriola, MTN’s CEO, recently highlighted the mounting financial challenges during a tour of the company’s infrastructure in Lagos. He pointed out the increasing operational costs, primarily driven by rising diesel prices needed to power base stations, inflation, and the naira’s depreciation.
Toriola stressed that MTN has been relying on reserves accumulated over the past 20 years, a strategy that is no longer sustainable. He noted that there hasn’t been a tariff increase in over a decade, even as costs continue to sky rocket. According to him, adjusting tariffs is essential to maintaining service quality and ensuring the sector’s survival. Without this adjustment, telecom operators might face severe operational disruptions, which could impact Nigeria’s digital economy.
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The industry has also faced external challenges, including significant foreign exchange losses. MTN reported a ₦519.1 billion loss in the first half of 2024, largely due to the naira’s depreciation. Additionally, MTN is owed ₦250 billion by Nigerian banks for Unstructured Supplementary Service Data (USSD) banking services, an unresolved debt that could lead to the discontinuation of USSD services if not addressed.
Toriola called for quick intervention from regulatory bodies, including the Central Bank of Nigeria and the Nigerian Communications Commission, to address the sector’s financial issues. He warned that without immediate reforms, the telecom industry, which has been a key driver of Nigeria’s economic growth, risks falling into crisis.
