
MTN Nigeria CEO, Karl Toriola
The Chief Executive Officer of the MTN Nigeria Communications Plc, Karl Toriola has called for about 100 per cent tariff increase so as to beat the excruciating cost of operations amongst Main Network Operators (MNO) in the country.
op given reasons why telecom companies want the current tariff rates in Nigeria to be increased speaking in an interview on Tuesday, Toriola averred that “The cost we are expending are actually exceeding our revenue,” adding that “Even though we are seeing revenue growth and there is no way that the industry can continue to sustain itself and provide the required quality of service under this structure.
According to him, “We have put forward the request of approximately 100 per cent in tariff increases to the regulators. I doubt they are going to approve that quantum of increases because they are very sensitive to the current economic situation in the country.
“But we are hopeful and optimistic that the realities are steering us in the face and the right decision will be taken for the sustainability of the industry.”
MTN Boss further noted that “Yes everyone in Nigeria has gone through difficult time in the last few years due to inflation and devaluation, etc, but the challenge that we face is not about profitability. It is about sustainability.
“If you imagine a company that four or five years ago earned N1 trillion and was making 10 per cent profit- N100 billion. The total cost put together was N900 billion. “Subsequently, two or three things happened like devaluation of the naira. Official exchange has gone up from about N420/$ or N450/$ to N1550/$ at the end of the year. So, that has driven our cost structures up drastically. “Diesel has gone from pre-COVID-19 times of N200-N300/litre to N1000; petrol has gone up several folds. Power generation and the cost of procuring material.”
Raw materials in the sector whose costs have risen include but not limited to batteries, fibre cables and base station towers. Also, the network service providers also pay software licensing fees for the networks and that the costs have risen astronomically.
The demanded tariff hikes, according to industry players, cover all telecom services, including voice and data.
Business Hilights recalls that whereas the rising demand for tariff increase seems to be landing on impaired, the regulator is developing thick skin to the outcries of operators.