You must have noticed a slight shift in the speed at which your mobile data gets exhausted. Are you wondering why?
Unfortunately, this data issue is just the beginning of a shift in cost of data and MTN Nigeria wants you to know this.
MTN is Nigeria’s largest telecom operator. It says there is an urgent need for the telecommunications sector to return to profitability to sustain its operations.
During a tour of MTN’s facilities in Ibeju-Lekki, Lagos, the Chief Executive Officer, Karl Toriola, highlighted this issue.
He addressed fellows of the Media Innovation Programme, sharing concerns about the sector’s significant losses.
According to him, an immediate action is necessary to reverse this troubling trend.
With around 78 million subscribers, MTN currently relies on profits accumulated over two decades.
MTN Operating On Reserves
The company, which has made a corporate social investment of ₦2.6bn, is operating on reserves that Toriola described as unsustainable in the long run.
“We must return the industry to profitability,” he emphasised, underscoring the necessity for reform.
Earlier this year, telecom operators called for a tariff hike—the first increase in 11 years.
They argued that this adjustment is essential to address rising operational costs and improve service quality.
Without these changes, they warned that financial viability and service standards will continue to decline.
Toriola reiterated the critical pressures the sector faces from rising operational costs, particularly escalating diesel prices needed to power base transceiver stations.
CEO warning
He warned that “there should be no delusion; if the tariff doesn’t go up, we will shut down”.
This statement underscores the urgent need for tariff adjustments that reflect economic realities.
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Additionally, Toriola noted that MTN, once one of Nigeria’s top corporate taxpayers, has seen its tax contributions decline due to these financial challenges.
Reflecting on the first-quarter results, both MTN and Airtel have adopted a cautious approach to capital expenditure for 2024.
Meanwhile, the two other mobile operators in the country, 9mobile and Globacom, remain privately held.
In 2024, MTN Nigeria reported a staggering ₦519.1bn loss in the first half of the year.
This loss primarily stemmed from foreign exchange losses due to the naira’s devaluation and high inflation rates.
Suspension Of MTN USSD
Furthermore, Toriola warned that MTN might suspend Unstructured Supplementary Service Data (USSD) banking services because of the ₦250bn debt owed by Nigerian banks.
The operator is seeking regulatory approval to halt support for USSD services used for banking transactions unless the debt is resolved and tariffs are adjusted.
However, Toriola expressed optimism about the new Governor of the Central Bank of Nigeria, Yemi Cardoso, and the Executive Vice Chairman of the Nigerian Communications Commission, Dr. Aminu Maida.
He believes they will intervene to help resolve the ongoing financial crisis.
In conclusion, Toriola stressed the critical role of the telecom industry in supporting Nigeria’s economy.
He urged the government and regulators to act quickly to prevent the dire consequences of inaction.
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