The Chief Financial Officer of MTN Nigeria, Mr. Modupe Kadri, has said that the company now has less money to invest in infrastructure as the ongoing forex crisis in the country has eroded the value of its capital spending which is fixed in Naira.
Kadri disclosed this in an exclusive interview with Nairametrics. According to him, the devaluation of the Naira is impacting all telecom operators as most of their expenditures are in dollars while they earn in Naira.
- “Now, it is a matter of cutting your coat according to your clothes. We are in an unusual time. From a governance perspective, our CAPEX is fixed in Naira, so with the devaluation of the Naira it does mean that you are going to get fewer dollars to spend.
- “But we’ve been here before, this is not the first time we’ve been in difficult times; 2017 was one COVID was another, and then this 2023/24. We just have to adjust and prioritize, focus on what is important,” he said.
Fair pricing of telecom services
On the need for fair pricing of telecom services, Kadri said the telecom companies in the country are engaging with the industry regulator to make sure that the industry can price appropriately to be able to justify those continued investments.
According to him, if that is not allowed to happen, the operators would soon be unable to invest further in infrastructure.
- “That’s where the problem exists down the road but for now, we are still pushing on. We took a 5G licence when nobody expected us to take a 5G licence.
- “Last year, we increased our population coverage of 5G from 3% to 11%. That investment alone is north of $120 million.
- “We made those investments because that’s what is required to build resilience or to carry the sort of traffic that we see on our network,” Kadri stated.
Further investments threatened
Emphasizing the need for fair pricing, the MTN CFO said the issue is not about MTN but about the telecom ecosystem entirely. He said the government needs to ensure that the ecosystem thrives through the right policies.
- “We’re a critical national infrastructure provider, and the nature of our investments is capital intensive, which means that to sustain what you have, you have to keep investing. Now, if you don’t have a business case for investments, what’s going to happen is that people would withhold or will not be able to invest, and why they don’t invest what happens to infrastructure? It degrades and it goes down.
- “That’s exactly what happened in the oil sector, where for years they were not investing and now we need those investments but we can’t get them. We need to learn from that,” he said.