MTN Nigeria has formally sought approval from the Nigerian Communications Commission (NCC) for a nearly 100 percent tariff hike, citing rising financial challenges in the telecom sector and the need for industry sustainability. The request was disclosed by MTN Nigeria's CEO, Karl Toriola, during an interview on Arise TV on Thursday. He reportedly stated that there is no way that the industry could continue to sustain itself and provide the required quality of service under the present structure.
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CEO Highlights Rising Operational Expenses
During the interview, MTN Nigeria's CEO emphasised the need for the proposal to address mounting operational expenses. He noted that the industry's long-term viability hinges on implementing such measures. Toriola highlighted the escalating costs due to inflation, devaluation, and rising fuel prices, which have pushed the industry to a breaking point.
"But the challenge that we face, and we're not talking about profitability in the industry, we're just talking about sustainability. Profitability will come on a longer-term basis," the report quoted the CEO as saying.
Impact of Rising Prices
Petrol prices have increased severalfold. The cost of power generation, the cost of procuring raw materials—what we call raw materials includes items like batteries, fiber cables, base stations, and towers—has risen significantly. To roll out and maintain these networks, we also pay software licensing fees, the CEO reportedly highlighted.
Call for Industry Sustainability Over Profitability
"We've put forward requests of approximately 100 percent tariff increases to regulators. I doubt they're going to approve that quantum of increases because they are very, very sensitive to the current economic situation in the country. But we're hopeful and optimistic that the realities are staring us in the face and the right decisions will be taken for the sustainability of the industry," the report quoted Toriola as saying.
He reportedly added, "We're not talking about profitability. We are talking about a situation of an existential threat to the entire industry. We're the biggest players, ourselves and Airtel."
Also Read: Airtel Urges Additional Tariff Revisions to Sustain Investments
Ripple Effect Across the Ecosystem
"If we are struggling with these kind of cost structures, there's no way the rest of the industry will not experience the same. And the truth is, this just doesn't affect the large operators. Every part of the ecosystem that works backwards from there is affected by exactly the same thing, because they’ve all seen their cost risen," he explained, according to the report.
Despite the challenges, Toriola reportedly expressed confidence that regulators would make the right decision, taking into account the sector's current realities.
