MTN Nigeria, the country’s leading telecom operator, has emphasized the urgent need for the telecommunications sector to regain profitability to ensure the sustainability of its operations.
MTN CEO Karl Toriola highlighted this issue on Monday during a tour of the company’s facilities in Ibeju-Lekki, Lagos, attended by Fellows of the Media Innovation Programme.
Toriola, who oversees about 78 million subscribers, pointed out that the sector has been incurring significant losses, and immediate measures are required to reverse this trend.
According to MTN’s 2023 Sustainability Report, the operator, with a corporate social investment of N2.6 billion, is now relying on profits accumulated over the past two decades. “We must return the industry to profitability,” Toriola stressed, underscoring the need for reform.
He explained that MTN is currently drawing from its reserves, a situation he described as unsustainable in the long term. Earlier this year, telecom operators, including MTN, renewed their calls for a tariff increase—the first in 11 years—to address rising operational costs and enhance service quality.
They argued that without such adjustments, financial viability and service standards would continue to decline. Toriola reiterated that the sector is under severe pressure from escalating operational costs, including 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,” highlighting the need for tariff adjustments to reflect economic realities. Toriola noted that MTN, once among Nigeria’s top corporate taxpayers, has seen a decline in tax contributions due to these financial challenges.
Reflecting on their first-quarter results, MTN and Airtel have adopted a cautious approach to capital expenditure for 2024. Meanwhile, the two other mobile operators in the country, 9mobile and Globacom, remain unlisted.
In 2024, MTN Nigeria reported a staggering N519.1 billion loss in the first half of the year, mainly attributed to foreign exchange losses driven by the naira’s devaluation and high inflation rates.
Toriola also warned of the potential suspension of 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 banking transactions unless the debt is resolved and tariffs are adjusted to match 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 help address the ongoing financial crisis.
He concluded by highlighting the essential role the telecom industry plays in supporting Nigeria’s economy and urged the government and regulators to act swiftly to avoid the severe consequences of inaction.
