MTN ON THE VERGE OF PACKING FROM NIGERIA AS IT RECORDS HIGH LOSSES

On Monday, 21st October, the CEO of MTN, Toriola Karl, revealed during a visit by Fellows of the Media Innovation Program to the Ibeju-Lekki MTN facility, in Lagos that MTN Nigeria may have to shut down due to various financial losses recorded. According to him, MTN has been leveraging its reserves accumulated for about two decades. 

Reserves are funds that are kept on hand to meet planned or unplanned financial requirements. This comes to mean that the telecom company's sustenance has been dependent on its reserved funds. 

Recall that MTN Nigeria has been in commercial operation since 2001, it has also been declared the largest telecom operator in the country. The telecom company had also gone ahead to collaborate with commercial banks and established the Unstructured Supplementary Service Data (USSD) which aids customers from doing wireless operations on their bank accounts, like cash transfers, Balance Enquiry, Airtime and data top up, service payments, Customer services, etc.

However, from the CEO's revelations, the current declining state of the economy of Nigeria had long taken its toll on the company, bringing it to high operating costs caused by escalating diesel prices and about 519.1 billion naira loss due to foreign exchange and the devalued naira. Coupled with this, MTN which was once one of Nigeria's top corporate taxpayers has experienced a decline in tax contributions due to the financial challenges.

Also, the Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) are apparently owing Mobile Network Operations (MNO) about 250billion, as a result of the use of the USSD. This, according to him, may eventually lead to the suspension of service on the network for banking operations.

Toriola further stated that ‘MTN and the entire industry are in dire situation’ and there is need for tariff increment to reflect the current economy of the country, but ‘if tariff doesn't go up, we will shut down!'