MTN Group has expressed its gratitude to the Nigerian authorities for approving a significant 50% tariff increase for telecom operators in the country.
The adjustment is the first in 12 years in the closely regulated industry and had been discussed for months by the regulator, the Nigerian Communications Commission (NCC) for months.
MTN is Nigeria’s largest mobile network operator, with over 80 million subscribers, and the country is the South African-based firm’s biggest market.
“MTN Group and MTN Nigeria deeply appreciates the support of the NCC and other relevant authorities, as well as the industry body in Nigeria, in ensuring the telecoms sector remains sustainable in the country,” the parent company said in a statement Tuesday.
“The tariff adjustment represents an important step towards addressing the impacts of the prevailing economic challenges on MTN Nigeria and the industry as a whole. It will enable MTN Nigeria to maintain the critical investments required to deliver reliable, high-quality services to its customers, as well as continue to support Nigeria’s digital transformation agenda, including driving inclusive growth for all stakeholders.”
The tariff increase comes at a time when telecom operators, including MTN Nigeria, have faced significant foreign exchange losses due to the depreciation of the naira.
In its recent Q3 2024 results, MTN Nigeria reported a foreign exchange loss of ₦514.9 billion ($331 million), which had initially led to a drop in investor confidence. However, analysts are optimistic that the tariff adjustment will help MTN Nigeria mitigate these losses and return to profitability by Q1 2025.
The market responded positively, with MTN Nigeria’s shares rising nearly 10% following the tariff approval. At the close of the market on Tuesday, MTN Nigeria’s shares were priced at ₦256.30, marking their highest level since March 2024.
The gain was short-lived though as the company lost steam on Wednesday, losing 3.63%.
The news had little impact on Airtel Africa, which operates across 14 African markets. The other operators – Globacom and 9Mobile – are not publicly listed.
The tariff increase is expected to bolster MTN Nigeria’s finances, stabilize its revenue streams, and support its long-term growth trajectory, benefiting both the company and the broader Nigerian economy.
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