MTN CEO Gives Reasons as Telcos Seek 100% Increase in Call, Data Tariff
- Nigerian telecommunication companies are seeking government approval to raise tariffs by 100 per cent
- The companies believe that the current economic situation in the country makes doing business very difficult
- Karl Toriola, CEO of MTN Nigeria, explained in an interview why it is important for the NCC to approve the hike
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Telecommunication operators in Nigeria have asked the Nigerian Communications Commission to approve a 100% increase in tariffs in the first quarter of 2025.
In a proposal submitted to the commission, the telcos said the increase would help address rising operational costs driven by inflation and naira’s devaluation.
Source: Getty Images
The telcos' decision was communicated by Karl Toriola, CEO of MTN Nigeria, while speaking on AriseTV on Thursday, January 2, 2025.
According to Toriola, the sector is grappling with sustainability challenges, warning that failure to adjust tariffs could jeopardize the industry’s survival.
Toriola said:
“The costs we are expending are exceeding our revenue even though we are seeing revenue growth.
"There is no way the industry can continue to sustain itself and provide the required quality service under this structure.”
However, the CEO expressed concerns that the Nigerian Communications Commission will approve the proposal remains uncertain.
Despite the worries, Toriola expressed optimism that regulators would make the right decision, taking into account the realities of the sector, Punch reports.
He added.
“We are hopeful and optimistic that the realities are staring us in the face and the right decision will be taken for the sustainability of the industry."
The CEO explained that the proposed increase is to ensure the industry's long-term sustainability rather than short-term profitability.
“I believe we’re all on the same side, the policymakers, the regulators, our Chairman of ALTON, Gbenga Adebayo, and the industry.
"We’re united because we share concerns about a few fundamental issues. First, human rights, are critical to driving any economy. Without a sustainable industry, the broader economy and the well-being of the people will be negatively impacted.”
Telco operation challenges
The telecom sector has faced growing financial strain, with operating costs outpacing revenues despite growth in service income.
MTN Nigeria reported a record N514.93 billion loss for the nine months ending September 2024, following a N137 billion loss in 2023.
Despite a 33.7% rise in service revenue to N2.37 trillion, Airtel also reported a 46.9% drop in revenue to $755 million over the same period.
NCC okays disconnection of exchange telecoms
Ealier, Legit.ng reported that the NCC had authorised Exchange Telecommunications Limited to separate from MTN Nigeria Communications Limited.
Exchange Telecoms was found to have provided insufficient justification for its inability to cover the expenses, according to NCC.
The business is currently the sole supplier of international call transit from all Nigerian Mobile Network Operators (MNO) to A-Z destinations abroad.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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