Nigeria’s move to raise telecom tariffs sends MTN to 6-month high

The Nigerian government has confirmed there will soon be an increase in phone, SMS, and data tariffs, sending MTN stocks to their highest levels in six months as investors position for returns.

Bosun Tijani, Minister of Communications, Innovation, and Digital Economy, confirmed plans to hike tariffs Wednesday, clarifying it would not be the 100% increase sought by operators. He said the Nigerian Communications Commission (NCC) will issue a directive after consultations.

“There’s been agitation for a 100% tariff increase,” Mr. Tijani said at a stakeholder meeting in Abuja, per The Cable. “But it won’t be 100%. We aim to balance protecting citizens while ensuring companies can invest significantly.”

Aminu Maida, NCC’s executive vice-chairman, indicated a tariff announcement would be made within two weeks.

Long-Awaited Adjustment

Despite soaring costs, telecom operators have been unable to raise prices for years. MTN Nigeria, Airtel, Glo and 9Mobile have lobbied for price reviews, but the NCC blocked adjustments. On December 30, 2024, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) warned of service cuts if tariffs remained unchanged, while the Association of Telecommunications Companies of Nigeria (ATCON) urged a hike by early 2025.

The current economic crisis, with 28-year-high inflation and naira devaluation, has severely hurt telecoms. MTN Nigeria posted a ₦137 billion loss in 2023, growing to ₦514.9 billion in the first nine months of 2024. Airtel Africa reported a $89 million FY 2024 loss, largely tied to Nigeria.

Airtel Nigeria’s representative at the meeting with the minister, Femi Adeniran, said rising costs made the increase necessary to sustain the sector.

Amidst the losses, MTN shares plunged below N200 for months, but rebounded after the tariff announcement, closing at ₦242 on Thursday, its highest since June.

“Anyone with foresight knows that MTN will bounce back,” a market analyst noted on Nairaland. “There’s no way the government won’t allow them to increase tariffs, given that everything has more than doubled in the country.”