Karl Toriola, the CEO of MTN Nigeria, has issued a stark warning about the dire state of the country’s telecommunications sector, describing it as being in “a deep crisis.”
Speaking on Tuesday at a telecom investment forum organized by Financial Derivatives Company (FDC) in Lagos, Toriola highlighted the severe sustainability challenges facing telecom operators across Nigeria.
“Nobody is going to put in $1 with the expected return of 60 cents on the dollar,” he said.
“There’s no way under the surface of the earth, 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 adjustments to pricing, the industry’s ability to function and attract investment is in jeopardy.”
He pointed out that despite two decades of growth and liberalization, the sector is now threatened by rising costs and unsustainable pricing structures. Toriola emphasized that a price increase is not just necessary but has become “an absolute necessity” to prevent the industry from collapsing.
“The sector is in an intensive care unit,” Toriola said, warning that without urgent intervention, the flow of new investment into the telecom sector could dry up entirely.
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He noted that the financial returns expected from the industry have become “so low that they threaten its very survival,” making continued investment unviable.
“Nobody is going to put in $1 with the expected return of 60 cents on the dollar,” he said, underscoring the need for immediate changes to revive the sector. Toriola explained that static pricing, maintained for 11 years despite significant inflation and forex devaluation, is no longer tenable.
“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,” he said.
Without adjustments to pricing, Toriola warned that the industry’s ability to function and attract investment is in jeopardy.