The Chief Executive Officer of MTN Nigeria Communications Plc, Karl Toriola, has disclosed that telecom companies have submitted a proposal to the Nigerian Communications Commission seeking approval for a 100% increase in tariffs.
Toriola revealed this during a live television interview on Thursday, monitored by THE POINT.
He said the proposed tariff hike would apply to all telecom services, including voice and data.
Toriola explained that the decision to request the increment stems from rising operational costs threatening the survival of telecom operators in the country.
“The costs we are expending are actually exceeding our revenue. Even though we are seeing revenue growth, there is no way that the industry can continue to sustain itself and provide the required quality of service under this structure,” Toriola stated.
The NCC has yet to approve the tariff increase, citing concerns about the hardship faced by consumers. Minister of Communication and Digital Economy, Bosun Tijani, emphasized in a recent interview that the challenges within the communication sector extend beyond tariff reviews.
However, Toriola highlighted the critical situation faced by the telecom industry.
“We have put forward the request of approximately 100% 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 staring us in the face, and the right decision will be taken for the sustainability of the industry,” he said.
While acknowledging the government’s support through initiatives such as the National Infrastructure Bill, which protects telecom infrastructures as national assets, Toriola stressed the urgency of addressing the sector’s sustainability challenges.
“Yes, everyone in Nigeria has gone through a difficult time in the last few years due to inflation and devaluation, but the challenge we face is not about profitability; it is about sustainability,” Toriola noted.
He further explained how devaluation and inflation have escalated costs across the board.
“If you imagine a company that four or five years ago earned N1 trillion and was making 10 per cent profit—N100bn—the total cost put together was N900bn. Subsequently, two or three things happened, like the devaluation of the naira.
“Official exchange has gone up from about N420/$ or N450/$ to N1,550/$ 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 N1,000; petrol has gone up several folds. Power generation and the cost of procuring material.”
He explained how the industry is being further strained by the sharp increase in the cost of basic raw materials like batteries, fibre cables, and base station towers as well as software licensing fees for network operations.
Toriola’s remarks highlight the pressing need for a sustainable strategy to manage the telecom sector in the face of Nigeria’s difficult economic circumstances.
