MTN Nigeria Plans Shutdown Without Tariff Hike, CEO Warns

MTN Nigeria, the country’s largest telecom operator, has issued a stark warning about the future of its operations, emphasizing that without an urgent increase in tariffs, it may be forced to shut down. Karl Toriola, MTN Nigeria’s Chief Executive Officer, made this critical announcement on Monday during a tour of MTN’s facilities by Fellows of the Media Innovation Programme in Ibeju-Lekki, Lagos.

Toriola, who oversees a massive subscriber base of 78 million, highlighted the mounting financial pressures faced by the telecommunications sector. He disclosed that the industry has been suffering significant losses, and immediate action is required to prevent further decline.

In the face of these challenges, Toriola stressed the importance of returning the sector to profitability. He revealed that MTN Nigeria, which has contributed N2.6 billion to corporate social investment according to its 2023 Sustainability Report, is currently operating on its accumulated reserves from the past two decades. This, he said, is unsustainable in the long term.

Calls for Tariff Hike to Address Rising Costs

Earlier this year, telecom operators, including MTN, renewed calls for a tariff hike—the first in 11 years—to combat rising operational costs and enhance service quality. Without such an increase, they warned, both financial stability and service delivery would continue to suffer.

Toriola underscored the severity of the situation, citing the escalating costs of diesel needed to power base transceiver stations as one of the main drivers of rising expenses. He bluntly stated, “There should be no delusion; if the tariff doesn’t go up, we will shut down,” stressing the need for tariffs to reflect the current economic realities.

Declining Tax Contributions and Capital Expenditure

Once a major corporate taxpayer in Nigeria, MTN has seen its tax contributions drop significantly due to the financial challenges plaguing the sector. Reflecting this cautious approach, MTN and Airtel have both scaled back their capital expenditures for 2024.

According to MTN’s 2024 financial reports, the company posted a staggering N519.1 billion loss in the first half of the year, largely due to foreign exchange losses caused by the naira’s devaluation and high inflation rates. This financial blow has added further pressure to the company’s call for tariff adjustments.

USSD Services Under Threat Due to Bank Debts

In addition to the financial strain, Toriola warned that MTN might suspend Unstructured Supplementary Service Data (USSD) banking services due to a N250 billion debt owed by Nigerian banks. The telecom operator is seeking regulatory approval to halt support for these essential services unless the debt is cleared and tariffs are revised to reflect the current economic situation.

Hope for Regulatory Intervention

Despite the challenges, Toriola expressed optimism that the newly appointed Governor of the Central Bank of Nigeria, Yemi Cardoso, and the Executive Vice Chairman of the Nigerian Communications Commission, Dr. Aminu Maida, will step in to resolve the financial crisis.

He concluded by urging the government and regulators to take swift action, warning that the collapse of the telecom industry would have far-reaching consequences for the Nigerian economy.

For more details on MTN’s financial situation and the challenges facing Nigeria’s telecommunications sector, read the full report here.

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