SH0CKING: MTN give reason why they will shutdown in Nigeria, CEO explains
Thompson Nsisongabasi
Oct 22, 2024
CEO Says Tariff Must Increase or 'MTN Will Shut Down' Due to Devalued Naira
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Karl Toriola, the Chief Executive Officer (CEO) of MTN, has said that the telecommunications company would have to shut down if its tariff prices remained the same.
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The Punch quoted Toriola who said this while taking a tour of the company's facilities with fellows of the Media Innovation Programme (MIP), an MTN initiative, in Ibeju-Lekki, Lagos, on Monday.
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Toriola stated that the tariff hike was necessary to sustain their telecommunications operations amid Nigeria's rising inflation.
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"There should be no delusion, if the tariff doesn't go up we will shut down,ÔÇØ Toriola said.
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"MTN and the entire industry are in a dire situation. MTN is loss-making because of the naira devaluation. The fundamentals need to change. Tariffs have to be changed.
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"...We must return the industry to profitability.ÔÇØ
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Toriola explained that the consistent devaluation of the naira and an unsustainable debt of N250 billion owed by the Federal Government to Mobile Network Operators (MNOs) has caused players in the industry to continue to run on losses.
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He revealed that the N250 billion debt was accrued from the Unstructured Supplementary Service Data (USSD) used for banking transactions. He said the service might be suspended and also subjected to regulatory approval.
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Toriola stated that the telecommunication network was surviving on reserves from the last 20 years, and made agitations for an increment in tariff for the first time in 11 years due to rising operational costs.
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He stressed that the increment was essential to adjust to the new economic realities.
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On October 2, Starlink revealed that its internet subscription had increased from N38,000 to N75,000 due to rising inflation. Although the Nigerian Communications Commission (NCC) first claimed it did not authorise the increment, it said it had taken a pre-enforcement action against the company.
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— Thompson Nsisongabasi