The largest telecom provider in the nation, MTN Nigeria, has emphasized how critical it is for the telecom industry to earn a profit again to continue operating.
This was revealed by MTN CEO Karl Toriola on Monday when Fellows of the Media Innovation Program toured MTN’s facilities in Ibeju-Lekki, Lagos.
The MTN CEO, who oversees over 78 million users, identified the industry’s recent large losses and stated that quick action is required to buck the trend.
According to its 2023 Sustainability Report, the operator has made N2.6 billion in corporate social investment and is currently making ends meet with the revenues it has amassed over the last 20 years.
He emphasized the need for reform by saying, “We must bring the industry back to profitability.”
He went on to explain that the business is now running on its reserves, which he said is not long-term viable.
Telecom companies reaffirmed their demands earlier this year for a rate raise, the first in eleven years, in order to combat growing operating expenses and enhance service quality. They contended that service standards and financial sustainability would keep deteriorating in the absence of such changes.
Toriola reaffirmed that growing operational expenses, such as the increased cost of diesel needed to power base transceiver stations, are putting significant pressure on the industry.
He emphasized the urgent need for tariff revisions to reflect economic reality by warning, “There should be no delusion; if the tariff doesn’t go up, we will shut down.”
Toriola pointed out that these financial difficulties have caused MTN, formerly one of Nigeria’s largest corporate taxpayers, to reduce its tax payments.
MTN and Airtel have taken a conservative approach to capital expenditure for 2024 in light of their first-quarter results.
