“Telecoms Sector Is In Deep Crisis, Price Increase Inevitable” – MTN Nigeria CEO

The Chief Executive Officer of MTN Nigeria, Karl Toriola, has said the telecommunications sector in the country is in a “deep crisis”
According to him, there are serious sustainability challenges being faced by the sector throughout the country.

While sharing his view during the telecom investment forum organised by Financial Derivatives Company (FDC) in Lagos, Toriola noted that the sector is now threatened by rising costs and unsustainable pricing, noting that a price increase has become unavoidable, stressing that it is now an “absolute necessity.”

According to him, there is a need to save the sector from imminent collapse as it is “in an intensive care unit”.
“Nobody is going to put in $1 with the expected return of 60 cents on the dollar,” he said.

Toriola, stressing the need for the sector’s revival, said without apt changes, the flow of new investment into the sector could dry up entirely.
He claimed that static pricing is no longer tenable.

“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.

He opined that some of the basic issues facing the sector are those of the cost of capital, to increment in infrastructures such as base stations and diesel generators.

“Without adjustments to pricing, the industry’s ability to function and attract investment is in jeopardy.”

,,,,,,While acknowledging the recent progress in discussions with regulatory authorities, Toriola said the challenges faced remain critical, adding that stakeholders are beginning to understand the depth of the crisis and are considering necessary interventions, including price increases and concessions.

Toriola said “qualitative action needs to be swift and decisive to prevent the collapse of the industry”.