MTN Nigeria’s Chief Executive Officer, Karl Toriola, has warned that the telecommunications sector in Nigeria is facing a “deep crisis.” He highlighted that the industry is dealing with significant sustainability issues across the country.
Toriola shared these concerns at a telecom investment forum hosted by Financial Derivatives Company (FDC) in Lagos. He pointed out that rising costs and unsustainable pricing are major threats to the sector’s survival. According to him, a price increase is not just necessary but unavoidable at this point.
The CEO emphasized that the telecom sector is essentially on life support, stating, “Nobody is going to put in $1 with the expected return of 60 cents on the dollar.” He stressed that if the necessary changes are not made soon, the flow of new investments into the sector could come to a complete halt.
Toriola argued that the current pricing model, which has remained static for 11 years, is no longer feasible in today’s economic climate, characterized by inflation and forex devaluation. He also pointed to other challenges, such as the increasing costs of capital and infrastructure, including base stations and diesel generators.
While there has been some progress in discussions with regulatory authorities, Toriola acknowledged that the situation remains critical. He noted that stakeholders are starting to recognize the severity of the crisis and are considering interventions like price increases and concessions. However, he urged for swift and decisive action to prevent the industry’s collapse.
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