Karl Toriola, the Chief Executive Officer of MTN Nigeria, has declared the sector to be in a “deep crisis,” calling for immediate action to prevent its collapse.
Speaking at the Telecom Investment Forum organized by Financial Derivatives Company (FDC) in Lagos on Tuesday, Toriola outlined the severe challenges threatening the sustainability of telecom operators across the country.
Toriola noted that while the telecommunications sector has experienced significant growth over the past two decades, it is now grappling with unprecedented financial pressures.
Rising operational costs and static pricing, he said, have created an unsustainable business environment, jeopardizing the industry’s future.
“The telecommunications sector is in an intensive care unit,” Toriola warned. “We are facing escalating costs across the board—from capital expenses to the maintenance of critical infrastructure like base stations and diesel generators. Without an urgent adjustment to pricing, the ability of the industry to function and attract investment is in serious jeopardy.”
Toriola emphasized the necessity of a price increase, describing it as an “absolute necessity” to maintain the sector’s viability.
He pointed out that the static pricing model, which has remained unchanged for over a decade, is no longer tenable in the current economic climate marked by high inflation and significant foreign exchange devaluation.
“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 explained.
“The financial returns expected from the industry have become so low that they threaten its very survival. Nobody is going to put in $1 with the expected return of 60 cents on the dollar.”
Toriola’s comments reflect growing concerns within the telecommunications industry that, without timely and decisive action, the flow of new investment could dry up entirely, further exacerbating the crisis.
While Toriola acknowledged recent progress in discussions with regulatory authorities, he stressed that the challenges remain critical. Stakeholders, he said, are beginning to understand the depth of the crisis and are considering necessary interventions, including price increases and possible concessions.
“Qualitative action needs to be swift and decisive to prevent the collapse of this industry,” Toriola urged, highlighting that time is of the essence in addressing these issues.
