MTN Nigeria, the countrys largest telecom operator, ‘has stressed the urgent need for the telecommunications sector to return to profitability to sustain its operations.
Chief Executive Officer of MTN, Karl Toriola, made this known on Monday during a tour of MTNs facilities by Fellows of the Media Innovation Programme, in Ibeju-Lekki, Lagos.
This development follows the telecom operators’ persistent call for tariff increases in response to economic challenges.
The CEO said, There should be no delusion; if the tariff doesnt go up we will shut down, adding that the telco has survived by spending its savings and that the industry is living on borrowed time. MTN and the entire industry are in a dire situation. MTN is loss making because of naira devaluation. The fundamentals need to change. Tariffs have to be changed, he further said.
Toriola stated that the telecom company was once one of the largest contributors of corporate income tax to the Federal Inland Revenue Service (FIRS), but that this contribution has been reduced to zero as the company has stopped making profits.
In June 2024, reports indicated that Nigerian banks commenced the payment of the debt they owed telecom companies based on a payment plan agreed upon in the last quarter of 2023 but the banks have been slow to make payments, causing the debt to drag on for longer.
Speaking further, Toriola also warned that it may suspend Unstructured Supplementary Service Data banking services due to the N250bn debt owed by Nigerian banks.
The mobile network operator is seeking regulatory approval to halt support for USSD services used for banking transactions unless the debt is resolved and tariffs are adjusted to reflect the economic realities.
He warned that if authorities do not act to address this unsustainable debt, MNOs may be forced to seek regulatory approval to prohibit commercial banks from processing transactions via the USSD platform.
However, Toriola expressed optimism that the new Governor of the Central Bank of Nigeria, Yemi Cardoso, and the Executive Vice-Chairman of the Nigerian Communications Commission, (NCC), Dr. Aminu Maida, would intervene to help resolve the ongoing financial crisis.
He concluded by stressing the critical role the telecom industry plays in supporting Nigerias economy, urging the government and regulators to act quickly to prevent the dire consequences of inaction.
In 2024, MTN Nigeria reported a ?519.1 billion loss in the first half of the year, due to foreign exchange losses from the nairas devaluation and high inflation rates.
In August 2024, reports indicated that the country’s telecom operators are considering a load-shedding strategy similar to that used in the power sector to manage their services.
