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MTN Nigeria, the leading telecom provider in the country, has highlighted the pressing need for the telecommunications industry to regain profitability in order to maintain its operations. The company emphasized that without financial sustainability, the sector could face challenges in delivering reliable services to its growing customer base.
MTN’s Chief Executive Officer, Karl Toriola, disclosed this on Monday while hosting Fellows of the Media Innovation Programme during a tour of the company’s facilities in Ibeju-Lekki, Lagos. He emphasized the importance of profitability for sustaining operations.
Overseeing a subscriber base of 78 million, MTN’s CEO, Karl Toriola, raised concerns about the substantial losses accumulating in the telecommunications sector. He called for immediate action to prevent further financial decline and secure the industry’s future.
MTN, which has invested N2.6 billion in corporate social initiatives, is now surviving on profits it built up over the last two decades, according to its 2023 Sustainability Report. The report underscores the company’s reliance on past gains as it faces ongoing financial challenges.
“We must return the industry to profitability,” he stated, emphasising the necessity for reform.
Elaborating on the financial strain, Toriola stated that MTN is now relying on its reserves to maintain operations, a move he cautioned is not viable in the long run. He highlighted the need for immediate action to stabilize the company’s future.
Earlier this year, telecom operators renewed calls for a tariff hike—the first increase in 11 years—to address rising operational costs and improve service quality. Without such adjustments, they argued, financial viability and service standards will continue to decline.
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Toriola reiterated that the sector faces critical pressures from rising operational costs, including escalating diesel prices required to power base transceiver stations.
He warned, “There should be no delusion; if the tariff doesn’t go up, we will shut down,” underscoring the urgent need for tariff adjustments to reflect economic realities.
Toriola noted that MTN, once one of Nigeria’s top corporate taxpayers, has seen its tax contributions decline as a result of these financial challenges.
Reflecting on their first-quarter results, 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, are not publicly listed.
In 2024, MTN Nigeria reported a staggering N519.1bn loss in the first half of the year, primarily due to foreign exchange losses stemming from the naira’s devaluation and high inflation rates.
Speaking further, Toriola also warned that it may suspend Unstructured Supplementary Service Data banking services due to the N250bn debt owed by Nigerian banks.
