MTN Nigeria has issued a stark warning, indicating that it may be forced to shut down operations if tariffs are not increased to offset the rising operational costs that are threatening the profitability of the telecommunications sector.
Karl Toriola, MTN Nigeria’s CEO, made this clear during a tour of the company’s facilities in Ibeju-Lekki, Lagos. He revealed that the telecom sector has been grappling with significant financial losses, and urgent measures must be taken to reverse the trend. He explained that MTN, which currently boasts around 78 million subscribers, has been operating on financial reserves accumulated over the past two decades. Toriola described this reliance on reserves as unsustainable.
A major factor contributing to the increased operational costs, Toriola pointed out, is the surge in diesel prices. Diesel is essential for powering MTN’s base transceiver stations (BTS), which play a critical role in maintaining the company’s network infrastructure. The spike in diesel prices has added considerable pressure to the company’s financial performance, further exacerbating the challenges it faces.
Toriola underscored the importance of ensuring that the telecom industry returns to a state of profitability. He warned that, without an adjustment in tariffs, MTN may be left with no option but to cease operations.
“There should be no delusion; if the tariff doesn’t go up, we will shut down,” Toriola stated, emphasizing the severity of the situation.
READ ALSO
MTN, which was once one of the largest corporate taxpayers in Nigeria, has seen a notable decline in its tax contributions in recent years due to the financial difficulties facing the telecom sector. Toriola’s comments highlight the urgent need for action to safeguard the future of one of Nigeria’s largest telecommunications providers and to ensure the sustainability of the sector as a whole
