Karl Toriola, CEO of MTN Nigeria, has reiterated the need for the telecommunications sector to return to profitability to sustain its operations.
This development follows the telecom operators’ persistent call for tariff increases in response to economic challenges.
According to the Nations, the CEO said, “There should be no delusion; if the tariff doesn’t go up we will shut down,” during a tour of MTN’s facilities by Fellows of the Media Innovation Programme in Ibeju-Lekki, Lagos,
He added that the telco has survived by spending its savings and that the industry is living on borrowed time.
“MTN and the entire industry are in a dire situation. MTN is loss making because of naira devaluation. The fundamentals need to change. Tariffs have to be changed,” he said.
Toriola stated that the telecom company was once one of the largest contributors of corporate income tax to the Federal Inland Revenue Service (FIRS), but that this contribution has been reduced to zero as the company has stopped making profits.
In June 2024, reports indicated that Nigerian banks commenced the payment of the debt they owed telecom companies based on a payment plan agreed upon in the last quarter of 2023 but the banks have been slow to make payments, causing the debt to drag on for longer.
Toriola, on the other hand, expressed concern in the new development about the substantial debt owed to mobile network operators (MNOs) for using the Unstructured Supplementary Service Data (USSD) system.
He warned that if authorities do not act to address this unsustainable debt, MNOs may be forced to seek regulatory approval to prohibit commercial banks from processing transactions via the USSD platform.
In August 2024, reports indicated that the country’s telecom operators are considering a load-shedding strategy similar to that used in the power sector to manage their services.
Then, Engr. Gbenga Adebayo, Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), stated that the economic challenges have severely affected telecom companies, potentially hindering their ability to service all facilities simultaneously.
In 2024, MTN Nigeria reported a ₦519.1 billion loss in the first half of the year, due to foreign exchange losses from the naira’s devaluation and high inflation rates.
