Chief Executive Officer (CEO) of MTN Nigeria, Karl Toriola, has raised alarms about the dire state of the country’s telecommunications sector, describing it as being in a “deep crisis.” Speaking on Tuesday at the Telecom Investment Forum organized by Financial Derivatives Company (FDC) in Lagos, Toriola highlighted the severe sustainability challenges faced by telecom operators despite the sector’s growth over the past two decades.
Toriola underscored that the industry is now at a critical juncture, with rising operational costs and unsustainable pricing models threatening its viability. He argued that a price increase is now an “absolute necessity” for the sector to survive.
“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 explained. “Without adjustments to pricing, the industry’s ability to function and attract investment is in jeopardy.”
He pointed out that the static pricing over the past 11 years is unsustainable, especially in light of Nigeria’s current inflationary environment and foreign exchange (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,” Toriola said.
The MTN Nigeria CEO warned that the financial returns expected from the telecom industry have plummeted to levels that now “threaten its very survival.” He stressed that without necessary changes, the flow of new investment into the sector could cease entirely.
Toriola acknowledged that there has been progress in discussions with regulatory authorities but emphasized that the challenges facing the industry remain critical. He called for urgent and decisive actions to prevent the collapse of the sector. “Qualitative action needs to be swift and decisive to prevent the collapse of this industry,” he asserted.
His warning comes at a crucial time for Nigeria’s telecom sector, which has been grappling with the dual pressures of rising costs and unsustainable pricing. As the industry teeters on the edge, stakeholders are beginning to realize the depth of the crisis and are exploring potential interventions, including necessary price increases and regulatory concessions.
