MTN Nigeria Warns Of Shutdown Without Increase In Tariffs

MTN Nigeria Warns Of Shutdown Without Increase In TariffsMTN Nigeria has warned that it may have to shut down if the government does not revise policies to allow for a tariff increase. The telecommunications company stressed the urgent need for the sector to return to profitability to sustain its operations.....KINDLY READ THE FULL STORY HERE▶

During a recent visit to MTN’s facilities in Ibeju-Lekki, CEO Karl Toriola highlighted that the industry is facing significant financial challenges, with MTN managing around 78 million subscribers. He noted that without immediate action, the company’s financial losses would continue to grow.

In its 2023 Sustainability Report, MTN revealed it has invested ₦2.6 billion in corporate social initiatives but is currently relying on profits accumulated over the last 20 years—a situation Toriola described as unsustainable. He emphasized, “We must return the industry to profitability,” calling for necessary reforms.

Earlier this year, telecom providers requested a tariff increase—the first in over a decade—to cope with rising operational costs and improve service quality. Toriola pointed out that soaring diesel prices for base stations are straining the industry. He warned, “If the tariff doesn’t go up, we will shut down,” underscoring the urgency of the situation.

Toriola also noted that MTN’s tax contributions have declined due to financial difficulties, affecting its status as one of Nigeria’s top corporate taxpayers. In light of recent losses of ₦519.1 billion in the first half of 2024—largely from foreign exchange losses related to naira devaluation and high inflation—MTN and Airtel are taking a cautious approach to capital expenditures for 2024.

MTN is also considering suspending its USSD banking services, which are currently burdened by a ₦250 billion debt owed by Nigerian banks. The company is seeking regulatory approval to discontinue these services unless the debt is settled and tariffs are adjusted.

Despite these challenges, Toriola remains hopeful that the new Central Bank Governor, Yemi Cardoso, and the Executive Vice Chairman of the Nigerian Communications Commission, Dr. Aminu Maida, will take steps to alleviate financial pressures on the sector. He stressed the importance of the telecommunications industry in supporting Nigeria’s economy and urged swift action from the government and regulators to prevent severe repercussions.

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