Karl Toriola, the Chief Executive Officer (CEO) of MTN Nigeria, has issued a stark warning regarding the state of the country’s telecommunications sector, describing it as being “in a deep crisis.”
Toriola made this statement during a telecom investment forum organized by Financial Derivatives Company (FDC) in Lagos on Tuesday, emphasising the severe challenges facing telecom operators despite the growth experienced in the sector over the past two decades.
According to Toriola, the telecommunications industry is now under significant threat due to escalating costs and unsustainable pricing structures.
He stressed that the sector’s sustainability is at risk unless immediate adjustments are made, specifically calling for a necessary price increase to avert further damage.
Toriola detailed the rising costs faced by telecom operators, which include the increased cost of capital and the soaring expenses required to maintain infrastructure such as base stations and diesel generators.
MTN boss pointed out that the industry’s ability to function effectively and continue to attract investment is now in jeopardy unless these costs are addressed.
For over a decade, the telecom sector has maintained static pricing, a situation that Toriola argues is no longer tenable in the current economic climate.
He highlighted the significant impact of inflation and forex devaluation, stating that it is unrealistic for the industry to sustain the same pricing structure under such conditions.
The MTN Nigeria CEO warned that the financial returns from the industry are now so low that they threaten its very survival.
He expressed concern that without appropriate changes, the flow of new investments into the sector could cease entirely, leading to further deterioration.
Although Toriola acknowledged that there has been some progress in discussions with regulatory authorities, he underscored that the challenges facing the telecoms sector remain critical, urging swift and decisive action to prevent the industry’s collapse.
The warning from MTN Nigeria’s CEO comes at a crucial time for the telecoms sector, which has been struggling with the dual pressures of rising costs and unsustainable pricing.
As the industry faces the brink of collapse, stakeholders are beginning to grasp the severity of the crisis and are contemplating necessary interventions, including potential price increases and regulatory concessions.
