MTN Nigeria warns of possible shutdown due to high costs, urging tariff increase to sustain telecom services amid financial pressures.
MTN Nigeria, the country’s largest telecommunications provider, has issued a stark warning that it may face closure if tariffs are not increased to offset escalating operational costs.
Karl Toriola, CEO of MTN Nigeria, disclosed this on Monday while hosting a facility tour in Ibeju-Lekki, Lagos, for participants in the Media Innovation Programme.
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Toriola, whose company serves over 78 million subscribers, explained that rising costs, particularly for diesel, have severely impacted MTN’s financial stability.
He warned, “There should be no delusion; if the tariff does not increase, we will shut down,” stressing that a tariff adjustment is necessary to sustain operations.
MTN, a significant corporate taxpayer and long-standing investor in Nigerian infrastructure, is now facing an unsustainable financial situation, as noted in its 2023 Sustainability Report.
Toriola pointed out that the company has invested over N2.6 billion in corporate social responsibility, but continued profitability is uncertain. “We must return the industry to profitability,” he emphasised, noting that current reserves are depleting.
This year, telecom companies urged a tariff revision, the first in 11 years, to address rising expenses and maintain service quality.
Without such adjustments, both financial viability and service standards could suffer, leading to widespread service impacts across Nigeria.
In addition, MTN Nigeria may soon suspend its Unstructured Supplementary Service Data (USSD) services, which enable mobile banking, due to a N250 billion debt owed by Nigerian banks.
Toriola revealed that the company is awaiting regulatory approval to halt USSD support if tariffs remain unchanged and debts unresolved.
The financial toll on MTN has been exacerbated by the naira’s devaluation and high inflation, with MTN recording a N519.1 billion loss in the first half of 2024, primarily due to foreign exchange losses.
Once a leading corporate taxpayer, MTN’s contributions to the Nigerian treasury have dwindled amid these financial pressures.
Despite the challenges, Toriola expressed optimism that new Central Bank Governor Yemi Cardoso and the Executive Vice Chairman of the Nigerian Communications Commission, Dr Aminu Maida, may intervene to support the sector.
He urged swift action from the government and regulators to ensure the sustainability of Nigeria’s telecommunications industry, emphasising its essential role in bolstering the nation’s economy.
