Nigeria’s leading telecom companies, Airtel, MTN Nigeria, and IHS Towers, are threatening to scale back investments due to financial pressures from multiple taxations, worsening power supply, and foreign exchange volatility losses.
Airtel Nigeria CEO Carl Cruz revealed that shareholders are reconsidering investment pace in Nigeria due to unfavorable market conditions.
MTN Nigeria’s CEO Karl Toriola urged the government to approve tariff hikes to offset rising costs, warning that political obligations should not dictate pricing.
IHS Towers’ VP Kazeem Oladepo emphasized the need for market dynamics to guide value extraction.
The telecom industry has invested over $70 billion since 2001, but an additional $4.33 billion is required to expand internet connectivity.
Maintenance costs are substantial, with ₦14 billion spent on repairing 59,000 fibre cuts between 2022 and 2023.
Telecom companies overthink these investments as they post losses in a difficult economic environment. Shareholders, whose equity contribution is at risk, also share their worries as losses have piled up in the last three quarters.
Regulators face a difficult decision: approving tariff increases may be unpopular, but underinvestment poses a significant risk, with a 1% drop in telecom investment potentially leading to a 1% drop in industry GDP contribution.
