MTN Targets ₦1.34 Trillion Revenue Boost from Tariff Hike
MTN Nigeria Communications Plc has projected an additional ₦1.34 trillion in revenue following the recent 50% tariff increase on calls, SMS, and data services.
The Tariff Hike Breakdown
On January 20, 2025, the Nigerian Communications Commission (NCC) approved the long-awaited tariff adjustment after a decade of lobbying by telecom operators. MTN swiftly implemented the new rates, leading to the following price changes:
• Call rates: Increased from ₦7.8 per minute (13 kobo per second) to ₦13.8 per minute (23 kobo per second) on its Pulse Bundle.
• SMS rates: Moved up from ₦4 to ₦6 per message.
• Data prices: Adjusted within the NCC-approved range.
Revenue & Growth Projections
MTN’s 2024 service revenue stood at ₦3.36 trillion. With the tariff hike, the company now expects a mid-40% boost in revenue for 2025, pushing total service revenue to at least ₦4.71 trillion.
MTN also projects:
✔️ EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) margin: Expected to be in the mid-40% range.
✔️ Capital expenditure (CAPEX) intensity: To remain in the “upper teens” as the company ramps up investments in network expansion.
Why the Tariff Increase?
MTN emphasized that the price hike is necessary to sustain investments in network infrastructure. The NCC has mandated telecom operators to improve service quality within three months or face regulatory penalties.
The Bigger Picture: Inflation & Devaluation Woes
Despite reporting record revenue of ₦3.36 trillion in 2024, MTN posted a ₦400.44 billion loss due to:
Rising operational costs—expenses surged by 76.59% year-on-year, reaching ₦1.52 trillion.
High inflation and naira devaluation, which severely impacted the company’s financial position.
MTN isn’t alone in facing financial struggles:
• Airtel Nigeria reported a 40.34% revenue drop to $738 million in the nine months ending December 2024, down from $1.24 billion in 2023.
Market Reactions & Consumer Concerns
Experts have mixed opinions on the tariff increase:
MTN & Airtel CEOs argue that the move will boost cash flow and ensure long-term sector stability.
Bismarck Rewane (CEO, Financial Derivatives Company) warns that consumers will feel the pinch, leading to reduced usage in the short term.
Gbenga Adebayo (Chairman, ALTON) links the previous decline in service quality to underinvestment in the sector due to outdated pricing models.
Consumer Behavior: What Happens Next?
MTN’s COO, Ayham Moussa, stated that it’s still too early to gauge consumer reactions, but data services remain key to MTN’s long-term strategy, given increasing internet dependence.
Meanwhile, Karl Toriola (MTN Nigeria CEO) drew parallels with Ghana’s recent tariff hike, stating:
“Consumption patterns tend to return to normal over time. But varying economic factors could make this period longer or shorter.”
⚡ Bottom Line
MTN’s tariff increase is a game-changer, set to bring in trillions in extra revenue. However, with inflation rising and consumers adjusting their spending, the coming months will reveal the true impact of this move on both the company and its subscribers.
What do you think? Will this tariff hike improve service quality, or will it just add more financial strain on Nigerians? Let’s discuss!
MTN Nigeria Communications Plc has projected an additional ₦1.34 trillion in revenue following the recent 50% tariff increase on calls, SMS, and data services.
The Tariff Hike Breakdown
On January 20, 2025, the Nigerian Communications Commission (NCC) approved the long-awaited tariff adjustment after a decade of lobbying by telecom operators. MTN swiftly implemented the new rates, leading to the following price changes:
• Call rates: Increased from ₦7.8 per minute (13 kobo per second) to ₦13.8 per minute (23 kobo per second) on its Pulse Bundle.
• SMS rates: Moved up from ₦4 to ₦6 per message.
• Data prices: Adjusted within the NCC-approved range.
Revenue & Growth Projections
MTN’s 2024 service revenue stood at ₦3.36 trillion. With the tariff hike, the company now expects a mid-40% boost in revenue for 2025, pushing total service revenue to at least ₦4.71 trillion.
MTN also projects:
✔️ EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) margin: Expected to be in the mid-40% range.
✔️ Capital expenditure (CAPEX) intensity: To remain in the “upper teens” as the company ramps up investments in network expansion.
Why the Tariff Increase?
MTN emphasized that the price hike is necessary to sustain investments in network infrastructure. The NCC has mandated telecom operators to improve service quality within three months or face regulatory penalties.
The Bigger Picture: Inflation & Devaluation Woes
Despite reporting record revenue of ₦3.36 trillion in 2024, MTN posted a ₦400.44 billion loss due to:
Rising operational costs—expenses surged by 76.59% year-on-year, reaching ₦1.52 trillion.
High inflation and naira devaluation, which severely impacted the company’s financial position.
MTN isn’t alone in facing financial struggles:
• Airtel Nigeria reported a 40.34% revenue drop to $738 million in the nine months ending December 2024, down from $1.24 billion in 2023.
Market Reactions & Consumer Concerns
Experts have mixed opinions on the tariff increase:
MTN & Airtel CEOs argue that the move will boost cash flow and ensure long-term sector stability.
Bismarck Rewane (CEO, Financial Derivatives Company) warns that consumers will feel the pinch, leading to reduced usage in the short term.
Gbenga Adebayo (Chairman, ALTON) links the previous decline in service quality to underinvestment in the sector due to outdated pricing models.
Consumer Behavior: What Happens Next?
MTN’s COO, Ayham Moussa, stated that it’s still too early to gauge consumer reactions, but data services remain key to MTN’s long-term strategy, given increasing internet dependence.
Meanwhile, Karl Toriola (MTN Nigeria CEO) drew parallels with Ghana’s recent tariff hike, stating:
“Consumption patterns tend to return to normal over time. But varying economic factors could make this period longer or shorter.”
⚡ Bottom Line
MTN’s tariff increase is a game-changer, set to bring in trillions in extra revenue. However, with inflation rising and consumers adjusting their spending, the coming months will reveal the true impact of this move on both the company and its subscribers.
What do you think? Will this tariff hike improve service quality, or will it just add more financial strain on Nigerians? Let’s discuss!
