MTN Nigeria, the largest telecommunications operator in the country, has raised alarms over the urgent need for the sector to regain profitability to ensure its sustainability.
During a facility tour in Ibeju-Lekki, Lagos, CEO Karl Toriola highlighted the significant financial losses that have plagued the industry, emphasizing that MTN is currently relying on profits accumulated over two decades.
Toriola, who oversees approximately 78 million subscribers, stated, “We must return the industry to profitability,” explaining the unsustainable nature of the current financial situation.
He attributed the sector's struggles to escalating operational costs and a pressing need for tariff reforms. The rising prices of diesel, essential for powering base transceiver stations, coupled with the devaluation of the naira and high inflation rates, have severely impacted MTN's financial health.
Earlier this year, MTN reported a staggering loss of N519.1 billion in the first half of 2024, primarily due to foreign exchange losses linked to the naira's depreciation. This alarming trend prompted telecom operators to advocate for a tariff increase—the first in 11 years—to alleviate rising operational costs and enhance service quality.
Toriola warned that without necessary adjustments to tariffs, financial viability and service standards would continue to deteriorate. “There should be no delusion; if the tariff doesn’t go up, we will shut down,” he asserted.
The financial challenges extend beyond operational costs. Toriola revealed that Nigerian banks owe MTN N250 billion in unpaid fees related to Unstructured Supplementary Service Data (USSD) banking services.
He indicated that unless this debt is resolved and tariffs are adjusted, MTN may have to suspend these services.
