Technology
Why We Are Pushing For 100% Tariff Increase: MTN (Video)
By Gideon Ayeni
Telecommunications operators in Nigeria are calling for a 100% increase in service tariffs, Karl Toriola, the Chief Executive Officer of MTN Nigeria, disclosed on Thursday.
However, Toriola acknowledged that the Nigerian Communications Commission (NCC) is unlikely to approve such a substantial tariff increase for services rendered by MTN due to the nation’s current economic challenges.
Speaking during an interview on Arise TV, Toriola explained the growing financial strain on the telecom sector, driven by inflation and the sharp devaluation of the naira. He stressed that the industry is grappling with sustainability rather than profitability as operational costs continue to surpass revenues, hence the rationale behind the proposed tariff increase.
“There should be no delusion; if the tariff doesn’t go up, we will shut down,” Toriola warned, emphasizing the dire need for an upward review of tariffs.
Watch the video below;
Telecom operators have been pushing for tariff increases for over a decade. In 2022, they proposed a 40% hike, but recent losses have intensified calls for further reviews. MTN Nigeria, for instance, reported a record N514.93 billion loss for the nine months ending September 2024, following a N137 billion loss in 2023. Similarly, Airtel reported a 46.9% revenue decline to $755 million during the same period, despite MTN’s service revenue growing by 33.7% to N2.37 trillion.
Toriola highlighted the sector’s unsustainable operating costs: “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.”
Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), expressed concern about potential service disruptions if the tariff issue isn’t resolved. Following a stakeholder meeting in December, he warned, “Operators may not be able to provide services in some areas and at some times of the day, leaving millions disconnected.”
Bosun Tijani, the Minister of Communications, Innovation, and Digital Economy, also acknowledged the possibility of a tariff review. “Yes, there may be a need for it,” he said, adding that a broader strategy is necessary to ensure competitiveness in the telecom sector.
What Lies Ahead
Industry stakeholders believe that tariff adjustments will be a decisive factor for the telecom sector’s survival in 2025. While approval for an increase has not been finalized, there are strong indications that the NCC may soon greenlight the changes.
As Nigerians brace for potential hikes, the conversation around balancing affordability with industry sustainability remains a critical focus for policymakers and operators alike.
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