Karl Toriola, chief executive, MTN Nigeria has defended recent tariff hikes by mobile network operators, stating they are essential for the “survival” of the telecoms industry in Nigeria, despite significant criticism.
Karl Toriola, chief executive, MTN Nigeria
The Nigerian Communications Commission (NCC) granted mobile network operators permission to raise tariffs by up to 50% last month, a change reportedly implemented on 11 February.
The increase has sparked public outrage, as mobile connectivity has become a vital necessity in daily life across the West African nation.
In an interview with Developing Telecoms, Toriola pushed back against criticism that the price surge was excessive, arguing that tariffs should have increased by approximately 300% to reflect the naira’s sharp devaluation and the country’s soaring inflation.
Addressing the impact of currency devaluation, Toriola emphasised that MTN purchases network equipment and software in US dollars, a process that has become significantly more expensive. With the naira’s decline, operators are now receiving three times fewer dollars than they did in 2023, making operations more challenging.
In February 2023, businesses could exchange 460 naira for one US dollar, but the currency has since devalued sharply. At the time of writing, a single dollar was worth 1,510 naira.
As Nigeria grapples with the sharp devaluation, MTN has been severely affected.
The company was technically bankrupt in 2023 as its liabilities surpassed its assets—a deeply concerning issue for the wider MTN Group, as Nigeria remains one of its highest revenue-generating markets.
“Because of these factors, we’ve seen our costs rise dramatically. The cost of leasing tower space and supplying energy to cell sites increased by 120% in the first three quarters of 2024. So, in comparison, a 50% tariff increase is not that high,” said Toriola.