Open Letter To Karl Toriola, CEO Of MTN Nigeria

Dear Mr. Karl Toriola,
I am writing this letter to you as the CEO of MTN Nigeria, the leading telecommunications company in our nation. As a concerned citizen and a long-time customer, I feel compelled to address a few critical issues that affect not only your company but also the broader Nigerian telecom sector and ICT infrastructure.

Recently, when I read in the news your warning that MTN may be forced to shut down if tariffs are not increased, I became really worried but not shocked.

Any careful observer can tell that the current pricing structure and operational environment is not sustainable for telcos.

Based on media reports, Telco companies experienced a significant 40.87% drop in average revenue per user (ARPU) to $1.85 in Q3 2024, compared to $3.12 in the same period in 2023. MTN Nigeria's ARPU fell from $3.24 to $2.09 and Airtel Nigeria's ARPU decreasing from $3 to $1.60. Coupled with rising energy costs (with diesel and petrol prices increasing by 66% and 257% respectively in 2023), increased operational expenses, and reduced capital expenditure due to financial pressures, I can understand why it is a pretty difficult period for the sector.

Every company wants to keep its lights on and make a profit and if the fundamentals no longer support that, what then is the point of investing? So I agree that unless changes are made, the industry is living on borrowed time.

I also recognize that recording a staggering N519.1 billion loss in the first half of 2024 due to the persistent foreign exchange volatility and the continued devaluation of the naira, and being owed N250 billion by Nigerian banks for USSD services can be, to put it mildly, discouraging.

The truth, as you probably know better than anyone, is that operating a business in Nigeria is hard and difficult. The skyrocketing cost of maintaining an extensive network of base stations and infrastructure is enormous. Hence, I must commend MTN's resilience in the face of economic and regulatory challenges.

In addition, the recent announcement of plans by your company to build West Africa's largest data centre gladdens my heart. It is a testament to your commitment to advancing Nigeria's digital infrastructure as this initiative will not only enhance data storage capabilities but also create job opportunities and attract foreign investment, further solidifying MTN's position as a key player in Nigeria's tech ecosystem.

MTN Nigeria is a very important company in Nigeria. You have been instrumental in revolutionising telecommunications in Nigeria, providing connectivity to millions and contributing substantially to our GDP.

However, with great success comes great responsibility. The quality of service provided by MTN Nigeria has been a subject of concern for many users. Nigerians have frequently complained about issues like poor network connectivity, sudden line disconnections, rapid data depletion, high data costs, network outages due to fiber cuts, difficulties with NIN-SIM linkage, poor customer service, and occasional issues with call quality. While I understand the challenges of operating in a complex environment like Nigeria, I want to implore MTN to continue to invest in improving its infrastructure and service delivery.

To put this in perspective, MTN Nigeria serves over 78 million subscribers, which is more than any other network can boast of. With this, MTN’s market share of the mobile telecommunications market stood at 50.50% as of September, while Airtel’s 34.76%.

In fact, MTN Nigeria's contribution to Nigeria's GDP stands at an impressive 7%, according to recent reports. This substantial economic impact underscores the vital role MTN plays in our nation's growth. Hence any disruption in service affects not just individual users but also businesses, emergency services, and the overall economy.

The potential shutdown would have far-reaching consequences for Nigeria's digital infrastructure. MTN Nigeria is not just a telecommunications provider; it is a critical component of the country's economic and communication ecosystem.

So I urge you to find alternative strategies to manage inflationary pressures, and continue to engage the regulators on a meaningful tariff adjustment.

To the Nigerian government and regulators, I appeal for a more collaborative approach in dealing with the telcos including MTN Nigeria. While regulatory oversight is necessary, it should not stifle innovation or hinder the growth of companies that contribute significantly to our economy.

As the situation unfolds, all eyes are on the Nigerian Communications Commission and government regulators to see how they will respond to MTN's dire warning. The potential shutdown of Africa's largest telecommunications network would be a seismic event with massive implications for Nigeria's digital economy.

To conclude, Mr Toriola, MTN Nigeria's success is intertwined with Nigeria's progress. As you navigate the challenges ahead, remember that millions of Nigerians rely on your services daily. Your commitment to excellence will not only benefit MTN but will also contribute to the realization of Nigeria's digital potential.

I also advise that you work closely with Mr President’s team of advisers including the Minister of Communications Bosun Tijani, NCC Chairman Dr. Aminu Maida and Special Adviser to the President on Technology and Digital Economy Idris Alubankudi as this falls directly within their purview. I am confident that together you can salvage the telecommunications sector. May we never return to the days of NITEL.

I look forward to seeing MTN Nigeria continue to grow, innovate, and lead in the years to come.

Sincerely,
Adeola Adepoju