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Karl Toriola, the CEO of MTN Nigeria, has sounded the alarm on the country’s telecommunications sector, warning that it is teetering on the edge of stagnation due to mounting inflation, forex devaluation, and unsustainable service tariffs.
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Speaking at a telecom investment forum organized by Financial Derivatives Company (FDC) on Tuesday in Lagos, Toriola noted that while the sector had experienced significant growth over the past two decades, it is now in a critical state, requiring immediate intervention from the government and other stakeholders to ensure its survival. He stressed that a hike in service costs is inevitable.
“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,” said Toriola.
Adding: “Without adjustments to pricing, the industry’s ability to function and attract investment is in jeopardy.”
Carl Cruz, CEO of Airtel Nigeria, echoed Toriola’s concerns but expressed a more optimistic view, suggesting that with prompt and decisive action, the sector could quickly recover.
The perspectives shared by Toriola and Cruz reflect the position of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), which has called for an upward review of telecom service prices to reflect current market realities.
During an interview with IT Edge News in Lagos, ALTON Chairman Gbenga Adebayo stressed the need for operators to have the flexibility to set tariffs that align with the prevailing economic climate, particularly in the face of persistent inflation.
“For us to have a sustainable industry, in the face of the challenges that we face, the operators must be allowed to price right. We must have the right tariffs,” Adebayo stated. “If the government continues to control pricing, it will reach a point where the sector stagnates, impacting the major players and deterring future investment in the economy.”
Toriola further underscored the urgency, stating, “Qualitative action needs to be swift and decisive to prevent the collapse of this industry. In an environment characterized by high inflation and forex devaluation, no industry can sustain the same prices for 11 years.”
Both ALTON and the Association of Telecommunication Companies of Nigeria (ATCON), led by Tony Izuagbe Emoekpere, have emphasized that a favorable regulatory environment, infrastructure development, enhanced security measures, and necessary pricing adjustments are crucial for unlocking the full potential of Nigeria’s telecommunications sector. This, they argue, would drive economic growth and societal development nationwide.
Despite the telecommunications companies’ calls for a price review, citing stagnant pricing over the past decade, the Nigerian Communications Commission (NCC) and the Ministry of Communications, Innovation, and Digital Economy have remained silent, expressing concerns about potential consumer impacts and the possible hindrance to expanding access.
