MTN Nigeria, the nation’s largest telecom operator, has highlighted the critical need for the telecommunications sector to return to profitability in order to maintain its operations.
Speaking on Monday during a tour of MTN’s facilities in Ibeju-Lekki, Lagos, CEO Karl Toriola underscored the mounting losses faced by the sector, which he described as unsustainable. With approximately 78 million subscribers, MTN is struggling to keep up with the financial strain, and Toriola emphasized the urgency of addressing the issue to prevent further deterioration.
According to MTN’s 2023 Sustainability Report, the company, which has a corporate social investment of N2.6 billion, is now relying on profits amassed over the past two decades.
“We must return the industry to profitability,” he stated, emphasizing the necessity for reform.
He further elaborated that the company is currently operating on its reserves, which he described as unsustainable in the long run.
Earlier this year, telecom operators renewed calls for a tariff hike—the first increase in 11 years—to address rising operational costs and improve service quality. Without such adjustments, they argued, financial viability and service standards would continue to decline.
Toriola reiterated that the sector faces critical pressures from rising operational costs, including escalating diesel prices required to power base transceiver stations.
He warned, “There should be no delusion; if the tariff doesn’t go up, we will shut down,” underscoring the urgent need for tariff adjustments to reflect economic realities.
Toriola highlighted that MTN, once one of Nigeria’s leading corporate taxpayers, has experienced a decline in tax contributions due to its current financial difficulties.
Reflecting on their first-quarter results, both MTN and Airtel have adopted a cautious approach toward capital expenditure for 2024. Meanwhile, 9mobile and Globacom, the country’s other two mobile operators, remain unlisted publicly.
In 2024, MTN Nigeria reported a staggering N519.1 billion loss in the first half of the year, largely attributed to foreign exchange losses caused by the naira’s devaluation and rising inflation.
Toriola further warned of the potential suspension of Unstructured Supplementary Service Data (USSD) banking services, citing a N250 billion debt owed by Nigerian banks. The mobile operator is seeking regulatory approval to halt these services unless the debt is resolved and tariffs are adjusted to reflect economic realities.
However, Toriola expressed optimism that the new Central Bank of Nigeria Governor, Yemi Cardoso, and Nigerian Communications Commission Executive Vice Chairman, Dr. Aminu Maida, would intervene to address the financial crisis.
He concluded by emphasizing the telecom industry’s critical role in supporting Nigeria’s economy and urged swift action from the government and regulators to prevent further negative impacts.