MTN Nigeria, the country’s largest telecommunications operator, has warned that it could go out of business if it does not raise tariffs to cope with rising operating costs.
The company’s Chief Executive Officer, Carl Triola, gave the warning on Monday during a tour of MTN’s facilities by fellows of the Media Innovation Program in Ibeju Lekki, Lagos.
Triola, who oversees about 78 million subscribers, said the telecommunications sector is facing severe financial strain, especially due to rising prices for diesel needed to power base station transmitter and receiver stations. emphasized. “There should be no delusions. If tariffs do not go up, we will shut down,” he said, underscoring the urgency of tariff adjustments to reflect current economic realities.
The CEO pointed out that MTN, which has invested NOK 2.6 billion in corporate social responsibility according to its 2023 sustainability report, is now running on profits accumulated over more than 20 years. However, he stressed that this is unsustainable. “We have to get the industry back into the black,” Triola stressed, adding that the company’s reserves are being depleted.
Earlier this year, carriers asked for the first rate increase in 11 years, citing the need to manage rising costs and maintain quality of service. Without such increases, the sector’s financial viability, along with service standards, will continue to decline, they warned.
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Mr. Triola also noted that MTN was once one of Nigeria’s largest corporate taxpayers, but its tax payments have declined due to financial difficulties. In the first half of 2024, MTN reported a staggering loss of N519.1 billion, mainly due to exchange losses due to the devaluation of the Naira and high inflation.
Mr Toriola further disclosed that MTN may suspend its Unstructured Supplementary Service Data (USSD) banking services as Nigerian banks are saddled with N250 billion in debt. “We are seeking regulatory approval to suspend support for USSD services used for banking transactions unless debts are resolved and tariffs are adjusted,” he said.
Despite the challenges, Toriola is optimistic that the new Central Bank of Nigeria Governor, Mr. Yemi Cardoso, and the Executive Vice-Chairman of the Communications Commission of Nigeria, Dr. Aminu Maida, will help resolve the financial crisis. expressed a view.
He concluded by highlighting the important role played by the telecommunications industry in supporting the Nigerian economy and calling on the government and regulators to take swift action.
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