MTN Nigeria’s CEO Karl Toriola has said the country’s telecommunications sector is in a “deep crisis” despite the phenomenal growth of the past two decades.
Toriola cited the severe sustainability challenges faced by telecom operators due to rising operational costs with current unsustainable pricing. He raised the alarm that the sector is “in an intensive care unit”, and that price increases were now an “absolute necessity” to “prevent the collapse” of the industry.
“Nobody is going to put in $1 with the expected return of 60 cents on the dollar,” Toriola argued.
He stressed the need for the sector’s revival and said that without apt changes, the flow of new investment into it could dry up entirely.
“There’s no way under the earth’s surface, in the kind of inflationary environment and forex devaluation that we’ve seen, that an industry can maintain prices the same for 11 years,” he said.
“The telecoms sector has faced escalating costs across the board — from the cost of capital to the soaring expenses of maintaining infrastructure like base stations and diesel generators.
“Without pricing adjustments, the industry’s ability to function and attract investment is in jeopardy.”
Toriola acknowledged recent progress in discussions with regulatory authorities but said the challenges remain critical.
Stakeholders are beginning to understand the depth of the crisis, but “qualitative action needs to be swift.”
Mr. Karl Toriola spoke on Tuesday at the telecom investment forum organized by Financial Derivatives Company (FDC) in Lagos.
His comments signal telecom users to brace up for potential price increases, which already is at levels too high for most Nigerians.
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