Tariff Hike Essential to Avoid Shutdown Amid Rising Diesel Costs – MTN CEO Warns

The Chief Executive Officer of MTN Nigeria, Karl Toriola, has warned over the telecom sector’s growing financial challenges, stating that immediate action is required to restore profitability.

He said this during a tour of MTN’s facilities in Ibeju-Lekki, Lagos, while addressing Fellows of the Media Innovation Programme, revealing that the company, with about 78 million subscribers, is operating on accumulated profits from the past two decades.

Toriola emphasised that there is a need for  urgent reforms, stating, “We must return the industry to profitability.”

He warned that the current situation is unsustainable, and without swift adjustments—particularly in tariff increases—the sector faces serious risks, including potential service disruptions. In 2023, telecom operators called for a tariff hike, the first in 11 years, in response to rising operational costs and inflationary pressures.

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These concerns have been exacerbated by escalating diesel prices, essential for powering base transceiver stations.  According to Toriola, these rising costs are threatening the financial viability of telecom services. “There should be no delusion; if the tariff doesn’t go up, we will shut down,” he warned.

MTN Nigeria, one of the largest corporate taxpayers in the country, has seen its tax contributions decline due to these financial constraints. The company reported a loss of N519.1 billion in the first half of 2024, largely attributed to foreign exchange losses following the devaluation of the naira and soaring inflation rates.

Toriola also warned of possible suspension of MTN’s Unstructured Supplementary Service Data (USSD) banking services due to an outstanding debt of N250 billion owed by Nigerian banks.

The company seeks regulatory approval to halt support for USSD services unless the debt is settled and tariffs are adjusted to align with current economic conditions.

Toriola expressed hope that the new Governor of the Central Bank of Nigeria, Yemi Cardoso, and the Executive Vice Chairman of the Nigerian Communications Commission, Dr. Aminu Maida, would intervene to help resolve the financial challenges facing the sector.

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Oluwasegun Sanusi

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