MTN CEO Karl Toriola Sends Message to FG on Tariffs for Airtel, 9Mobile, Others
- The chief executive officer of MTN Nigeria, Karl Toriola, has expressed worry over the state of the telecoms sector in Nigeria
- Toriola said the telco industry is in intensive care, needing urgent rescue to prevent it from imminent collapse
- He said that the current pricing model has become unsustainable due to rising operational costs and inflation
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
MTN's chief executive officer, Karl Toriola, has expressed deep concern over the crisis the Nigerian telecommunications industry is facing.
The MTN boss disclosed on Tuesday, August 13, 2024, at the telecom investment forum hosted by Financial Derivatives Company (FDC) in Lagos that despite the sector's growth in the past two decades, it now faces severe threats due to increasing costs and unsustainable pricing.
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Toriola calls for tariff hikes
Toriola stated that a price hike is necessary to tackle the need to rescue the sector from imminent collapse, saying that it is in an intensive unit.
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The MTN helmsman said the industry's financial returns are so low that they threaten its survival, casting suspicion on the viability of continued investment.
According to reports, MTN reported a post-tax loss of $137 billion for 2023, a significant difference from the N348.7 billion profit it recorded in 2022.
The telecoms giant attributed the massive loss to rising inflation, naira devaluation and FX shortages caused by geopolitical disruptions.
Toriola warns of imminent collapse of the sector
Toriola warned that new investment could dry up without the needed changes, pointing out that the current fixed pricing model is no longer bearable.
Toriola said:
“Nobody is going to put in $1 with the expected return of 60 cents on the dollar,” he said.
“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,”
Reports say Toriola acknowledged recent progress in talks with regulators but stressed that the challenges remain critical.
NCC denies tariff hike
Legit.ng earlier reported that the NCC denied tariff hikes, describing the reports as fake news.
Reports emerged that the commission has approved tariff increases for MTN, Airtel, Glo, and other telecom companies. The report added that the new increase will see Nigerians pay more for telecom services.
The report added that the new increase will see Nigerians pay more for telecom services.
NCC asks telcos to restrict their bundles
Meanwhile, the NCC issued new regulations mandating that telecommunication companies limit the number of tariff plans available to seven.
It said the telecom firms are immediately mandated to simplify the complexity of their plans and bundles, limiting the number seven.
The executive vice chairman of the commission, Aminu Maida, stressed the importance of clear, understandable information for consumers, stating that the guidelines seek to boost transparency, improve consumers' knowledge, and enhance fair competition among the licensees.
NCC issues new deadline for Nigerians to link their SIM
Legit.ng earlier reported that the NCC had directed telecommunication companies to extend the NIN-SIM verification deadline beyond the July 31 deadline.
Last week, the NCC asked telecom operators to reactivate mobile lines previously barred due to NIN-SIM verification challenges.
Many telecom subscribers were barred from making, receiving, or sending SMS via their phones due to their inability to properly verify their National Identification Numbers (NINs) with their subscribers’ SIMs.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
