“The Telecom Sector is in Intensive Care; Price Increases Inevitable” – MTN Nigeria CEO Karl Toriola

Karl Toriola, CEO of MTN Nigeria, has issued a stark warning about the state of the telecommunications sector in the country, describing it as being in a “deep crisis.” Speaking at the telecom investment forum hosted by the Financial Derivatives Company (FDC) in Lagos, Toriola highlighted severe sustainability issues affecting the industry nationwide.

The MTN Nigeria chief pointed out that rising operational costs and unsustainable pricing structures are putting the sector at risk. He emphasized that a price increase is now “an absolute necessity” to prevent the industry from collapsing, likening its current state to being in “intensive care.”

Toriola criticized the unrealistic expectation of attracting investment under the current conditions, stating, “Nobody is going to put in $1 with the expected return of 60 cents on the dollar.” He warned that without significant adjustments, the sector could see a complete halt in new investments.

The CEO stressed that maintaining static prices amidst inflation and currency devaluation is unsustainable, noting that the industry has kept prices unchanged for 11 years despite mounting financial pressures. Key issues include the high cost of capital and the need for infrastructure investments, such as base stations and diesel generators.

While acknowledging some progress in discussions with regulatory bodies, Toriola called for urgent and decisive actions to avert a crisis. He noted that stakeholders are beginning to recognize the severity of the situation and are exploring necessary interventions, including potential price adjustments and concessions.