MTN CFO Kadiri warns of telecom industry risks without policy changes 

MTN Nigeria, alongside other multinational business leaders, has urged the Federal Government to establish equitable regulations to support sustainable business investments in the country.

The appeal was made during a panel session at the 30th Nigerian Economic Summit held in Abuja, themed “Navigating Business Growth in a Volatile Environment.”

Modupe Kadri, Chief Financial Officer of MTN, noted the challenges posed by high inflation rates and fluctuations in foreign exchange, which have hindered effective operation within the telecommunications sector.

He noted the need for regulatory approval to adjust tariffs, stating that telecom companies have not been allowed to increase prices for over a decade, despite the rising costs of imported telecommunications equipment.

Kadri stressed the disparity in tariff adjustments between the telecommunications industry and sectors such as petroleum and electricity, where price increases have been permitted.

He warned that the current regulatory framework does not provide a level playing field, jeopardising the sustainability of telecommunications businesses.

The CFO pointed out that the telecom industry contributes significantly to Nigeria’s GDP, at 16 per cent, and stressed the importance of appropriate pricing to ensure investment viability.

“For 10 years now, telecommunication companies haven’t been permitted to increase prices, and this regulation is not providing us with a level playing field to operate. If we are to stay in business, this policy must be reviewed, similar to how electricity and fuel prices are adjusted to reflect current economic realities,” he said. “Our business is mainly dependent on foreign exchange, so customers need to understand that for them to receive the services they desire, it costs money.

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“When people have to invest in the country and are unable to monetise their investments, it cannot work. The only way this economy will thrive is if there is appropriate pricing such that investments in the sector are guaranteed. The government is talking about diversifying; I’m talking about survival. What is the business case for me to invest when I’m bleeding almost to death?

“The telecommunications industry contributes 16 per cent to the GDP, and it is not something that you can mess around with.”

He cautioned that failing to address these regulatory issues could lead to a decline similar to what has been experienced in the oil industry, which has seen a reduction in investments.

In addition to Kadri, Oyeyimka Adeboye, Chief Executive Officer of Mondelez West Africa, voiced concerns over the rising cost of doing business, which has reportedly tripled in the last two years.

She called for measures to minimise imports and improve access to financing for local production.

Courage Obadagbonyi, Chief Financial Officer of APM Terminals West Africa, highlighted the need for better coordination among government regulators to reduce confusion for businesses, asserting that a stable regulatory environment is essential for investment growth.

Mrs Nkechi Obi, Group Managing Director of Techno Oil Limited, added that strong policies are crucial for business success. She expressed optimism that the establishment of the Dangote refinery would help stabilise petroleum product prices and mentioned Techno Oil’s efforts to develop its refinery to mitigate sector uncertainties.