National Telescope national telescope newspaper
MTN Nigeria’s CEO, Karl Toriola, has warned that the telecom giant may shut down due to rising operational costs fueled by escalating diesel prices.
Toriola made this point during a tour of MTN’s facilities by Fellows of the Media Innovation Programme in Ibeju-Lekki, Lagos, emphasizing the urgency of tariff adjustments to reflect current economic realities.
He said, “We must return the industry to profitability,” Toriola said, highlighting that MTN’s reserves are depleting. The company, which oversees 78 million subscribers, has invested N2.6 billion in corporate social responsibility but is currently operating on profits accumulated over two decades – a situation Toriola deemed unsustainable.
Telecom operators have called for the first tariff hike in 11 years to manage rising costs and maintain service quality. Without this increase, the financial viability of the sector and service standards will continue to decline. MTN’s tax contributions have also declined due to financial challenges, with a reported N519.1 billion loss in the first half of 2024, primarily attributed to foreign exchange losses from the naira’s devaluation and high inflation.
Additionally, MTN may suspend Unstructured Supplementary Service Data (USSD) banking services due to a N250 billion debt owed by Nigerian banks. Toriola expressed optimism that the new Central Bank of Nigeria Governor, Yemi Cardoso, and the Executive Vice Chairman of the Nigerian Communications Commission, Dr. Aminu Maida, would help resolve the financial crisis.
Key concerns include:
- Rising Operational Costs: Escalating diesel prices threaten MTN’s profitability.
- Tariff Hike: First increase in 11 years necessary to sustain operations.
- USSD Banking Services: Suspension possible due to N250 billion debt.
- Financial Viability: Sector’s sustainability at risk without tariff adjustments.
- Government Support: Swift action urged to address telecom industry challenges.
Toriola concluded by stressing the critical role the telecom industry plays in supporting Nigeria’s economy.
