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MTN Nigeria Communications has warned that it will likely shut down operations unless it is allowed to review its tariff for data and calls.
MTN Chief Executive Officer, Karl Toriola said this during a tour of the company’s facilities in Ibeju-Lekki, Lagos.
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“There should be no delusion; if the tariff doesn’t go up, we will shut down,” said Toriola.
The country’s largest telecom operator raised the alarm despite a successful renegotiation of its tower leases with IHS and ATC Nigeria Wireless Infrastructure Solutions Limited (ATC).
MTN had explained that the revised terms substantially reduce the dollar-indexed component of the leases, making the leases majority naira-based, as well as set a cap for the naira CPI escalator component.
Over the past months, MTN which controls over 79.4 million customers had repeatedly called on regulators to approve a tariff hike after naira devaluation led to foreign exchange losses.
MTN in the first quarter of 2024 declared N519bn loss after tax. The firm recorded a negative earning per share of N24.7, down by 56 per cent compared to the N4.9 positive earning per share.
Retained earnings and shareholder’s funds were negative at N727.2bn and N577.7bn respectively.
“We must return the industry to profitability,” the CEO said in Lagos.
Toriola said the firm faces pressure due to Nigeria’s economic headwinds and the cost of doing business in the country.
In April 2024, telcos, under the aegis of the Association of Licensed Telecom Companies of Nigeria and the Association of Telecom Companies of Nigeria, issued a joint statement seeking the approval of the Nigerian Communications Commission (NCC) to approve tariff hikes.
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The associations said, “Despite the adverse economic headwinds, the telecommunications industry remains the only industry yet to review its general service pricing framework upward in the last 11 years, primarily due to regulatory constraints.
“For a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence.”
