MTN Nigeria has raised concerns about its future, warning that it may be forced to shut down if the country’s policies aren’t adjusted to allow for a tariff increase. The company stressed the need for urgent changes to help the telecommunications sector return to profitability.
Karl Toriola, the CEO of MTN Nigeria, delivered this message during a visit by participants of the Media Innovation Programme to MTN’s facilities in Ibeju-Lekki, Lagos. With around 78 million subscribers, Toriola highlighted the tough financial situation the industry is facing, stressing the need for immediate action.
According to its 2023 Sustainability Report, MTN has invested ₦2.6 billion in corporate social initiatives but is now relying on profits accumulated over the past two decades to keep afloat. “We need to make the industry profitable again,” Toriola emphasized, adding that continuing to rely on reserves is unsustainable in the long run.
Earlier this year, telecom providers, including MTN, called for a tariff review, citing rising operational costs and the need to improve service quality. They argued that without this adjustment, financial losses and declining service standards would continue. Toriola pointed out that the surging cost of diesel, which powers base stations, has put immense pressure on the industry.
“If we don’t increase tariffs, we will have to shut down,” Toriola bluntly warned, underscoring the urgency of the situation.
MTN, once one of Nigeria’s largest corporate taxpayers, has seen a drop in its tax contributions due to ongoing financial struggles. In the first half of 2024 alone, MTN reported a staggering loss of ₦519.1 billion, driven by foreign exchange losses from the naira devaluation and soaring inflation rates.
The company is also considering discontinuing its USSD banking services due to a massive debt of ₦250 billion owed by Nigerian banks. Toriola said MTN is seeking regulatory approval to stop supporting USSD services for banking unless the debt is cleared and tariffs are adjusted to reflect the current economic climate.
Despite these challenges, Toriola remains hopeful that the newly appointed Governor of the Central Bank of Nigeria, Yemi Cardoso, and the Nigerian Communications Commission’s Executive Vice Chairman, Dr. Aminu Maida, will take steps to address the crisis. He emphasized the critical role the telecom sector plays in supporting Nigeria’s economy, urging swift action to prevent severe consequences.
