Telecom Giant MTN To Shut Down If Government Fails To Approve Tariff Increase

Telecom Giant MTN To Shut Down If Government Fails To Approve Tariff Increase

MTN Nigeria has warned that it may be forced to shut down if the country’s current policies are not adjusted to allow an increase in tariffs. The telecommunications giant stressed that a tariff hike is crucial for the industry to regain profitability and continue operations.

MTN’s Chief Executive Officer, Karl Toriola, shared this concern during a visit by participants of the Media Innovation Programme to MTN’s facilities in Ibeju-Lekki, Lagos. With around 78 million subscribers, MTN is facing financial difficulties and is relying on reserves accumulated over the last 20 years to stay afloat.

According to Toriola, “We must return the industry to profitability.” He emphasized that without immediate reforms, the sustainability of the company is at risk.

Earlier this year, telecom providers called for the first tariff increase in over a decade, citing rising operational costs, including the soaring price of diesel used to power base stations. Without this adjustment, they warned, service quality and financial stability would continue to decline.

Toriola also warned of the possible suspension of MTN’s USSD banking services, due to an outstanding ₦250 billion debt owed by Nigerian banks. Unless the debt is addressed and tariffs are increased, the company may be forced to discontinue these services.

Despite the challenges, Toriola expressed hope that newly appointed officials, including Central Bank Governor Yemi Cardoso and Nigerian Communications Commission Executive Vice Chairman Dr. Aminu Maida, would take action to ease the industry’s financial strain.

MTN reported a ₦519.1 billion loss in the first half of 2024, largely due to foreign exchange losses following the naira’s devaluation and high inflation rates.

Toriola urged both the government and regulatory bodies to act quickly to avoid serious repercussions for the sector, which is vital to Nigeria’s economy.