MTN Nigeria Faces Rising Operational Costs, Calls for Urgent Tariff Review to Avoid Shutdown

MTN Nigeria has reported a significant increase in its operational costs over the past year, according to a recent analysis of the company’s financial statements. As of September 2024, MTN’s operational costs reached N1.1 trillion, a substantial rise from N575 billion in the same period the previous year. Additionally, the cost of sales rose from N289 billion to N382 billion within the same timeframe. Despite these rising costs, MTN recorded a profit before tax of N713.6 billion and a profit after tax of N514.9 billion.

In light of these challenges, MTN has called for a review of its tariffs to address the increasing operational expenses. CEO Karl Toriola has warned that without a tariff adjustment, the company could face severe sustainability issues, stating, “There should be no delusion; if the tariff doesn’t go up, we will shut down.” He emphasized that the telecommunications sector is experiencing significant losses, and immediate action is required to reverse this trend.

The Association of Licensed Telecoms Operators of Nigeria (ALTON) has echoed these concerns, suggesting that if economic challenges continue, the telecommunications industry may have to implement load shedding. ALTON Chairman Gbenga Adebayo highlighted the difficulties faced by telecom operators and the urgent need for policy reviews and interventions. He cautioned that while load shedding is not currently a reality, it could become necessary if the sector’s challenges are not addressed, drawing parallels to past issues in the electricity sector.