MTN Nigeria Records 91% Surge In Operation Cost As Telecoms Giant Posts Major Loss After Tax
A recent analysis of MTN Nigeria’s financial statements by Fusion Chronicles Nigeria reveals a sharp rise in the company’s operational costs over the past year. The telecom giant reported operational costs of N1.1 trillion as of September 2024, nearly double the N575 billion recorded in September 2023.
MTN’s cost of sales also rose, from N289 billion in September 2023 to N382 billion by September 2024. Despite these cost increases, the company achieved a profit before tax of N713.6 billion and a profit after tax of N514.9 billion.
This surge in expenses has led MTN to advocate for a review of current tariffs, as the company struggles to keep pace with rising operational costs. In October, MTN’s Chief Executive Officer, Karl Toriola, warned that without a tariff adjustment, the company might be forced to shut down. Toriola highlighted the severe financial challenges facing the telecommunications sector and stressed the need for immediate action to prevent further losses. He noted that MTN is currently operating on its reserves, a practice he called unsustainable in the long term.
“There should be no delusion; if the tariff doesn’t go up, we will shut down,” Toriola stated, underscoring the need for tariffs that reflect the current economic environment.
The Association of Licensed Telecom Operators of Nigeria (ALTON) expressed similar concerns, warning of potential load shedding in the telecom sector if economic challenges persist. In July, ALTON Chairman Gbenga Adebayo commented on the industry’s struggles, stressing the need for policy revisions and potential interventions to ensure sustainability. While load shedding has not yet begun in the telecom industry, Adebayo noted that it could become necessary if economic conditions do not improve.
“We don’t pray we get to that stage, but if the issues raised persist, load shedding may occur,” Adebayo said, likening the situation to Nigeria’s electricity sector, which has faced similar constraints.
Adebayo also pointed to high taxation as one of the key challenges affecting the telecommunications sector, complicating efforts to ensure long-term viability for telecom operators across the country.
