MTN Nigeria: “We’ll shut down if tariff hike is not approved”

MTN Nigeria, a leading telecommunications company in Nigeria, has stated that it may be forced to shut down operations if the Nigerian government does not approve a tariff hike.

As reported by the Diaspora Digital Media (DDM), the Chief Executive Officer of MTN Nigeria, Mr. Karl Toriola, disclosed the information on Monday while hosting Fellows of the Media Innovation Programme during a facility tour in Ibeju-Lekki, Lagos.

The nation’s premier telecommunications provider, emphasized the imperative need for sectoral profitability to ensure sustainable operations.

The CEO of MTN Nigeria, responsible for around 78 million subscribers, highlighted the sector’s considerable accumulation of losses, stressing the need for immediate corrective action.

“The telecommunications company’s 2023 Sustainability Report reveals a N2.6 billion commitment to corporate social responsibility, with current operational viability dependent on profits generated over a two-decade period,” Toriola stated.

“We must prioritize the industry’s return to profitability,” underscoring the urgent need for comprehensive reform.

The CEO emphasized that the MTN’s current reliance on its reserves is unsustainable over time.

In early 2024, telecommunications operators reiterated their appeal for a tariff adjustment, marking the first proposed increase in 11 years.

The request, according to them, aims to offset escalating operational costs and enhance service quality.

The MTN Nigeria CEO also emphasized that the telecommunications sector is confronting severe operational challenges, primarily driven by escalating expenses.

Specifically, he highlighted the significant impact of rising diesel prices, which are essential for powering base transceiver stations.

Toriola gave a stark warning stating, “there should be no delusion, if tariffs don’t increase, we’ll be forced to shut down.”

The CEO stated that the MTN’s financial difficulties have led to a significant decline in its tax contributions, despite previously being one of Nigeria’s leading corporate taxpayers.

Following the release of their first-quarter financial reports, MTN and Airtel have opted for a prudent approach to capital expenditure planning for the remainder of 2024.

Notably, 9mobile and Globacom, the two other prominent mobile network providers in the country, are privately owned and therefore do not publicly disclose their financial performance.

In the first six months of 2024, MTN Nigeria reported a significant pre-tax loss of N519.1 billion, primarily attributed to foreign exchange losses resulting from the naira’s devaluation and elevated inflation rates.

Speaking further, Toriola, issued a warning that the MTN may suspend Unstructured Supplementary Service Data (USSD) banking services due to the staggering N250 billion debt owed by Nigerian banks.

The CEO stated further that MTN Nigeria is seeking regulatory approval to discontinue USSD services for banking transactions unless the outstanding debt of N250 billion is settled and tariffs are adjusted to reflect current economic conditions.

However, the CEO expressed confidence that the Central Bank of Nigeria’s new Governor, Yemi Cardoso, and the Nigerian Communications Commission’s Executive Vice Chairman, Dr. Aminu Maida, will intervene to address the current financial crisis.

Toriola emphasized the telecom industry’s pivotal role in Nigeria’s economic growth,  and regulatory bodies to take swift action to mitigate potential repercussions.

About MTN

MTN (Mobile Telephone Networks) is a multinational telecommunications company headquartered in Johannesburg, South Africa.

It was founded in 1994 and operates in 21 countries across Africa and the Middle East.

MTN Nigeria

MTN Nigeria is the largest subsidiary of MTN Group, launched in 2001.

It provides mobile network services which include voice, data, and SMS.

MTN Nigeria also provides internet services (fiber broadband and mobile data), digital services (mobile financial services, music, and video streaming) and enterprise solutions (ICT services for businesses).

Key Statistics of MTN Nigeria

The telecommunication company has over 280 million subscribers worldwide and 70 million subscribers in Nigeria as of 2022.

It has over $10.5 billion revenue in 2022 and has over 20,000 employees globally.

Services and Products of MTN Nigeria

The telecom company offers voice and data services, mobile money (MTN Mobile Money), data bundles and internet plans.

It also offers enterprise solutions (ICT services) digital services (music, video streaming, and more)

Awards and Recognition

MTN was awarded the “Best Telecom Company in Nigeria and the Africa’s Most Valuable Brand in 2020.

Also, it received the “Best Mobile Network in Nigeria in 2019.

Challenges and Controversies

The service provider faces challenges like USSD banking dispute with Nigerian banks, regulatory issues with the Nigerian Communications Commission (NCC), and competition from other telecom operators.

Future Plans

MTN Nigeria aims at expanding 5G network coverage in Nigeria, enhancing digital services (e.g., mobile financial services), and investing in infrastructure development.

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