MTN Nigeria’s CEO, Karl Toriola, has pinpointed the need for the telecommunications industry to return to profitability to sustain its operations.
During a facility tour with Media Innovation Programme Fellows in Ibeju-Lekki, Lagos, Toriola warned of mounting losses and emphasised the importance of reform to address the sector’s financial instability.
Despite having around 78 million subscribers, Toriola revealed that MTN, Nigeria’s largest telecom operator, has been operating on its reserves; an unsustainable model for long-term survival.
The operator’s N2.6 billion corporate social investment, as cited in its 2023 Sustainability Report, is now under pressure due to persistent losses.
Earlier in the year, telecom operators, including MTN, called for a tariff increase to counteract surging operational costs, marking the first requested hike in 11 years.
Toriola reiterated the critical impact of rising costs, particularly diesel prices for powering base stations, warning that the sector faces potential shutdowns if tariffs are not adjusted to reflect the current economic realities.
The CEO pointed out that MTN’s contributions to corporate taxes have significantly decreased due to the financial challenges faced by the company.
In the first half of 2024, MTN Nigeria reported a massive loss of ₦519.1 billion, primarily due to foreign exchange losses linked to the naira’s devaluation and soaring inflation.
Adding to the financial strain, MTN is owed ₦250 billion by Nigerian banks for Unstructured Supplementary Service Data (USSD) banking services.
The company is seeking regulatory approval to halt USSD support until the debt is resolved and tariffs are reviewed.
Toriola expressed hope that the newly appointed Central Bank of Nigeria Governor, Yemi Cardoso, and the Nigerian Communications Commission Executive Vice Chairman, Dr. Aminu Maida, would step in to address these pressing issues.
He emphasized the telecom sector’s vital role in Nigeria’s economy and urged the government and regulators to act swiftly to prevent severe consequences.