MTNN’s Toriola Is Croaking A Broken Discordant Tune, Ticklish To Elon Musk’s Ears. So He Coos A Melody For Him
The Oasis Reporters
October 24, 2024
A bemused SpaceX satellite communications head, South African born Elon Musk who is now a notable American billionaire on his way to becoming a trillionaire innovative tech impresario probably listened to Carl Toriola crying to the economically beleaguered Nigerian government that without a tariff hike, MTN Nigeria may shut down.
Toriola has good reasons for his advocacy.
He warned that a potential shutdown is looming if tariffs are not increased to address the rising operational costs that are threatening the profitability of the telecommunications sector.
During a tour of MTN’s facilities in Ibeju-Lekki, Lagos, MTN’s CEO, Karl Toriola, said the telecom sector has been facing significant financial losses and urgent measures are needed to reverse the trend.
Toriola pointed out that MTN, which currently has around 78 million subscribers, is operating on reserves accumulated over the past two decades, a situation he described as unsustainable.
The company’s operating costs, especially diesel prices needed to power its base transceiver stations, have surged, adding pressure to its financial performance, he added.
He wants a return of the telecom industry to profitability, warning that without a tariff hike, MTN might be forced to shut down operations.
“There should be no delusion; if the tariff doesn’t go up, we will shut down,” he said.
How very true indeed. Everyone is worried because as MTN bemoans rising diesel costs, Nigerians desperately fret about petrol costs and most of their cars have become antiquated, rotting in garages because people choose not to drive them again due to fuel costs. They therefore make the call instead of traveling to the location.
Now to make the call is about to rise in cost in Nigeria’s hyper inflationary economy with shrinking jobs, pay freezes and high bills.
He noted that MTN, once one of the largest corporate taxpayers in Nigeria, has seen a decline in its tax contributions due to the financial challenges the sector is facing.
But is the government able to add two and two together in order to solve the problem?
That’s the big question.
But there is one aspect that MTN has remained so smug and lethargic about. Very little smart and futuristic thinking. Most profitable companies do not know about the race to remain on top, innovative and resilient to withstand the travails of a tomorrow.
This is one major factor that consigned NITEL into oblivion.
Unlike Engineer Elon Musk. He is always reading and always learning as well as practicing what he learns. Then he innovates and builds. He doesn’t even stop at building. He constantly improves on what he has built and then invents the newer building for tomorrow, which he brings to fruition today. Yet he never stops.
That’s the only way to remain relevant.
Professor Ndubuisi Ekekwe @ndekekwe says he remains convinced that the best days of terrestrial broadband providers like GSM companies are behind.
He adds further:
“Elon Musk goes all out with an asymmetric competitive playbook: “Elon Musk’s SpaceX has renewed its push for approval to significantly expand the Starlink satellite constellation, seeking permission from the Federal Communications Commission (FCC) to launch nearly 30,000 more satellites into low-Earth orbit.”
If they do approve these satellites, he could crash the cost of his data by up to a factor of 4, and by 2027, his cost model will be cheaper than whatever your local mobile provider is giving you. And because he has the satellite-to-cellphone capabilities already in place, a massive disintermediation is loading. I understand that our regulators and policymakers are always sleeping, but they cannot afford to do that on this matter”.
While MTN should be worried stiff at what is about to hit them, governments in Africa are still tone deaf.
Until it hits them.
Ndekwe again: “If Africa loses all the core taxes from the telecom sector to satellite providers which are not indigenous, our economies could collapse. So, they need to immediately put a tax regime at the African Union level on how to handle this new vector.
Understand that the solution is not for MTN, Glo or Safaricom going satellite. That is a waste of time”.
But this is where I disagree with the learned Professor.
Why?
He says, “None has the engineering capacity to design, make and launch satellites, and can only rely on external providers”.
Why do I disagree?
There are nano or cube satellites now. Imagine investing in our Nigerian universities for instance. Give them money and encourage them to produce nano or cube satellites with small payloads, somehow, they can figure out how to get them up. If Elon Musk can do it, why not Nigerian Universities?
Greg Abolo.
gregabolo@gmail.com
With additional reporting credits from:
Daily Trust
Professor Ndubuisi Ekekwe
X (formerly known as Twitter)
