MTN Reveals Nigerian Banks Owe ₦250 Billion for USSD Services, Surviving on Two-Decade Reserves

MTN Nigeria, one of the largest telecommunications providers in the country, has called for immediate steps to restore profitability to the sector. 

The company’s CEO, Karl Toriola, highlighted the challenges during a recent tour of the firm’s infrastructure in Lagos. He spoke about the financial pressures facing the telecom industry, emphasising the need for reforms to sustain operations.

Toriola explained that the sector is facing high operational expenses, driven by high diesel prices required to power base stations, as well as inflation and the devaluation of the naira. 

He noted that MTN is currently surviving on reserves accumulated over the last two decades, a situation that he described as unsustainable without further intervention.

The telecom sector has not seen a tariff increase in over a decade, despite an unending rise in expenses. According to Toriola, adjusting tariffs to reflect current economic situations is necessary to maintain service standards and ensure the survival of the industry. 

He warned that without an upward review of tariffs, telecom operators might be forced to halt services, a move that could have serious consequences for Nigeria’s digital economy.

The sector has also faced ordeals from external factors, including foreign exchange losses, which contributed to MTN reporting financial losses in the first half of 2024. The company recorded a ₦519.1 billion loss, largely attributed to the depreciation of the naira.

Toriola further pointed out that the issue of unpaid debts is another issue. MTN is owed ₦250 billion by Nigerian banks for Unstructured Supplementary Service Data (USSD) banking services. 

He stated that without regulatory intervention or a resolution to the debt, MTN may have no choice but to discontinue USSD services, which are widely used for banking transactions across the country.

However, the telecom giant believes that regulatory bodies, including the Central Bank of Nigeria and the Nigerian Communications Commission, will step in to resolve the sector’s financial challenges. 

Toriola urged the authorities to act quickly to avert a potential crisis, stressing the importance of the telecommunications industry in driving Nigeria’s economic growth.

The telecom industry in Nigeria has grown over the past two decades, but the increasing financial pressures threaten to reverse these gains unless immediate reforms are implemented.

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