FX crisis: MTN reports N519.1bn loss, may shutdown over rising operational costs

This is even as the it raised alarms over a potential shutdown if tariffs are not increased to address rising operational costs.

The company’s Chief Executive Officer, Karl Toriola, stated this during a tour of MTN’s facilities by Fellows of the Media Innovation Programme in Ibeju-Lekki, Lagos.

However, he revealed that the telecommunications sector is facing severe financial strain, especially from escalating diesel prices required to power base transceiver stations.

“There should be no delusion; if the tariff doesn’t go up, we will shut down,” he said, underscoring the urgency of tariff adjustments to reflect current economic realities,” he said.

The CEO noted that MTN, which has invested N2.6 billion in corporate social responsibility, according to its 2023 Sustainability Report, is currently operating on profits accumulated over two decades.

“This is unsustainable. We must return the industry to profitability. Our company’s reserves are depleting,” he said.

Earlier this year, telecom operators called for the first tariff hike in 11 years, citing the need to manage rising costs and maintain service quality. Without such an increase, they warned, the financial viability of the sector, along with service standards, would continue to decline.

Toriola also pointed out that MTN, once one of Nigeria’s top corporate taxpayers, has seen its tax contributions decline due to the financial challenges. In the first half of 2024, MTN reported a staggering N519.1 billion loss, largely attributed to foreign exchange losses from the naira’s devaluation and high inflation.

Conversely, he said that MTN may suspend Unstructured Supplementary Service Data (USSD) banking services due to a N250 billion debt owed by Nigerian banks.

“We are seeking regulatory approval to halt support for USSD services used for banking transactions unless the debt is resolved and tariffs are adjusted,” he said.

Despite the challenges, Toriola expressed optimism that the new Central Bank of Nigeria Governor, Yemi Cardoso, and the Executive Vice Chairman of the Nigerian Communications Commission, Dr. Aminu Maida, would step in to help resolve the financial crisis.

He called for swift action from the government and regulators, adding that the critical role the telecom industry plays in supporting Nigeria’s economy.