Karl Toriola, the Chief Executive Officer (CEO) of MTN Nigeria, has issued a warning, indicating that the telecommunications sector in the country is currently facing a significant crisis.
Speaking during a telecom investment forum organised by Financial Derivatives Company (FDC), the telecommunications company’s CEO emphasised the substantial sustainability challenges that telecom operators in the country are confronting, despite the growth they have experienced since the liberalisation two decades ago.
He stated that the sector faces escalating costs and unsustainable pricing, making a price increase an absolute necessity.
“The telecoms sector has faced escalating costs across the board — from the cost of capital to the soaring expenses of maintaining infrastructure like base stations and diesel generators,” Toriola said.
“Without pricing adjustments, the industry’s ability to function and attract investment is in jeopardy.”
Toriola added that over a decade of static pricing is untenable, especially in an inflationary environment with forex devaluation.
“There’s no way under the surface of the earth, in the kind of inflationary environment and forex devaluation that we’ve seen, that an industry can maintain prices the same for 11 years,” he said.
He also acknowledged that the industry’s anticipated financial gains are currently “so minimal that they endanger its continued existence.”
While he noted recent progress in talks with regulatory authorities, the MTN boss stressed that the existing challenges are still crucial.
With the industry on the verge of collapse, stakeholders are beginning to comprehend the severity of the crisis and are contemplating necessary interventions, such as price adjustments and concessions.