MTN CEO: Telcos want 100% tariff increase to address rising costs

Karl Toriola, chief executive officer (CEO) of MTN Nigeria, says telecommunication companies (telcos) in the country want a 100 percent increase in tariffs.

On April 25, 2024, telcos said their services were overdue for price increments as they have not raised rates in the last 11 years.

Speaking on the business segment of Channels Television’s Sunrise Daily on Friday, Toriola said the hike is necessary to address the escalating operational costs caused by inflation, and naira devaluation.

“We at MTN believe we need tariff adjustment of about 100 percent, I think the industry is pretty much aligned because we are all experiencing the same headwinds,” the CEO said.

“Now, the government is very sensitive to squeeze consumers’ wallets with the pressures that have come from inflation and currency devaluation on consumers.

“So, I am not sure they will give us 100 percent, but I am optimistic they will give us something substantial and maybe progressively over the course of the year we can have smaller adjustments that will help us to get back to where we need to be.”

He pointed out that while sectors like aviation and power have adjusted their tariffs to cope with rising costs, the telecommunications industry has yet to do so.

According to Toriola, global telecommunications industry statistics indicate Nigeria likely has the second or third lowest tariffs worldwide for both data and voice services.

‘TARIFF ADJUSTMENT CRITICAL TO MAINTAIN QUALITY SERVICE’

The proposed tariff adjustment, Toriola said, would not only ensure the sustainability of the telecoms industry but also enable companies to maintain and improve the quality of their services.

“What the tariff allows us to do is to continue to invest, continue to build capacity, build resilience, put in additional generators, authentic power supply system to give you stable and high-quality networks,” he said.

“So, it addresses sustainability and also enables the regulators to hold the big stick on the issue of quality of service and allows us consequently to invest in giving the quality of service Nigerians deserve.”

Toriola described 2024 as a “torrid year” for Nigeria’s telecommunications industry, citing the impacts of soaring inflation and the government’s devaluation of the naira.

He commended policymakers for taking steps aimed at ensuring the long-term sustainability of the sector.

Responding to concerns about potential service disruptions if the tariff increase is not approved, Toriola assured Nigerians that MTN and other network providers remain committed to keeping their networks operational.

“What I try to do is paint a realistic picture without being alarmist. The truth is that if you have any organisation that is spending 160 percent of what they earn in revenue, effectively at some point that organisation is going to shut down,” he said.

“So we are always going to act responsibly. We will use all our resources. We are keeping our networks up. We are not shutting down our networks at this point in time and we will continue to do so.”

On December 30, 2024, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) warned that its members might begin shedding services if urgent action is not taken to review tariffs, as the Nigerian telecommunications industry is facing critical challenges.