- MTN posts over N400bn loss, Airtel revenue drops by 40%
The Nigerian telecommunications sector is grappling with massive foreign exchange losses, naira devaluation, and rising operational costs, leading to a significant slowdown in growth.
Investigations revealed that the sector’s gross domestic product contribution dropped from 10.72% (2021-2022) to 6.25% (2023-2024).
Despite revenue surges, telcos are struggling with losses. MTN Nigeria’s revenue jumped 103.16% to N3.36 trillion in 2024, up from N1.65 trillion in 2021. Airtel Africa’s revenue also grew modestly by 4.99% to $4.76 billion. However, these gains were overshadowed by record losses due to currency devaluation and soaring expenses.
MTN Nigeria posted a N400.44 billion loss after tax in 2024, marking a 192.25 increase from N137.02 billion in 2023. The company’s FX losses hit N925.36 billion as the naira’s value plunged from N415.07/$ in 2021 to N1,500/$ in 2024.
Airtel Nigeria faced even steeper declines, with revenue plummeting 40.34% to $738 million in 2024 due to naira depreciation. Rising diesel costs also exacerbated operational expenses, with the company reporting an average 60% increase in diesel prices in Nigeria.
Telecoms have long been a pillar of Nigeria’s economy, playing a crucial role in lifting the country out of recession in Q4 2020.
However, post-pandemic economic challenges, high inflation, and currency volatility have stifled growth.
The sector’s overall GDP contribution fell to 5.42% in 2024, down from 7.91% in 2023, according to the National Bureau of Statistics.
The Regional Economist at Standard Bank Group, Abdulazeez Kuranga, noted that telecom growth has been shrinking since Q3 2023.
MTN Nigeria’s operating expenses soared 76.6% to N1.52 trillion in 2024, while Airtel Africa also cited currency devaluation in Nigeria, Malawi, and Zambia as a major cost driver. The Nigerian naira’s weighted average exchange rate fell from N677/$ to N1,532/$ in just nine months.
Industry experts warn that continued revenue declines could impact not just telecom providers but the entire economy. GSMA noted that a slowdown in mobile industry growth will negatively affect digital adoption, GDP expansion, and network quality.
In response to these challenges, the Nigerian Communications Commission approved a 50% tariff hike on January 20, 2025, marking the first major adjustment since 2013.
The move aims to help operators to bridge the gap between rising costs and stagnant pricing, ensuring continued investment in infrastructure and service quality.
MTN Nigeria expects the tariff increase to generate an additional N1.34 trillion in revenue.
According to MTN Nigeria CEO, Karl Toriola and Airtel Nigeria CEO Dinesh Balsingh, this additional revenue will be used to improve network quality and secure the sector’s long-term growth.
Despite the tariff adjustment, analysts remain cautious about the sector’s outlook.
Lead Economist at CardinalStone Partners, Olaolu Boboye, highlighted FX-related issues as a key barrier to growth, warning that most telecom firms are unlikely to increase capital expenditure in the near future.
As Nigeria’s telecom giants navigate a tough economic landscape, the sector’s ability to sustain growth will depend on stable exchange rates, policy support, and continued investment in infrastructure.
