Telecommunication companies are set to benefit from the increased demand for data services, according to Karl Toriola, the chief executive officer of MTN Nigeria.
Speaking on AriseTV on Thursday, the MTN boss noted that the demand for data service has driven data revenues to become the primary revenue source for the industry. According to the Nigerian Communications Commission (NCC), internet consumption has risen from 125,149.86 terabytes (TB) in December 2019 to 870,398.28 in October 2024.
Between January and September 2024, MTN Nigeria and Airtel Nigeria reported combined data revenues of N1.63 trillion, up from N254.32 billion in the same period of 2019. Over this time, voice revenues—once the primary income source for telcos—grew by only 70.74 percent to N1.44 trillion.
“We are positioning ourselves to capture the opportunities of growth for the next 10 years. The demand for data in Nigeria is exceptional and will continue to grow,” Toriola stated.
This has pushed MTN to strategically shift toward fixed broadband solutions, including fibre-to-home initiatives, as a long-term investment in Nigeria’s digital future. However, he stressed that addressing current issues facing the telecom industry is crucial to achieving this long-term growth potential.
The MTN CEO cited rising operational costs and foreign exchange (FX) volatility as key challenges facing the industry. He explained that the telcos are dealing with escalating costs of inputs like diesel, fibre cables, and software licensing fees, all of which have soared due to the devaluation of the naira and inflationary pressures.
Toriola elaborated on the industry’s financial situation, noting that some companies now spend more than they earn. “The challenge we face is not about profitability but about sustainability. For instance, costs that previously accounted for 90 per cent of a company’s revenue have now exceeded revenue itself,” he said.
To address this, he noted that telcos are requesting a 100 percent increase in tariffs. He, however, expressed doubts that the regulators would approve a full 100 percent increase, given the economic hardship many Nigerians are facing.
“We are optimistic that the realities are staring us in the face, and the right decisions will be taken for the sustainability of the industry,” he noted.
He acknowledged the government’s supportive role through initiatives such as the Critical National Infrastructure Bill, which aims to protect telecoms infrastructure and ensure collaboration with security agencies to address challenges like sabotage and vandalism.
Read also: Telcos want 100% tariff hike, but govt unlikely to approve — Toriola
Toriola also highlighted structural changes in 2024, including efforts to address the industry’s indebtedness and improve quality-of-service obligations. He revealed plans for greater accountability in 2025, reflecting a coordinated effort between the industry, regulators, and policymakers.
Toriola’s sentiments align with insights shared by Bismarck Rewane, CEO of Financial Derivatives Company, who noted the importance of cost-reflective tariffs as a tool to drive economic growth. According to Rewane, liberalising telco tariffs is essential for fostering investment in digital infrastructure, a critical component of Nigeria’s economic revitalisation.
Rewane suggested that such measures, coupled with investments in skills and technology, could boost the economy’s growth rate to over three or four percent. He emphasised that telecoms serve as a backbone for the digital revolution, making their sustainability a national priority.
On the government’s role, Bosun Tijani, Minister of Communications, Digital Economy, and Innovation, highlighted the importance of not just tariff adjustments but also broader strategies to enhance competitiveness.
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