MTN has announced a new partnership with authorities across many of its marketplaces, which include Nigeria. The partnership is aimed at acquiring permission to heighten both voice and data tariffs. The move is designed to reinstate profitability and bolster its financial circumstances.
The resolution followed MTN’s statement of a reduced full-year profit influenced by devaluation of the Nigerian naira. Due to the devaluation, MTN Nigeria, the company’s largest enterprise, underwent a post-tax loss of 135 billion naira, equivalent to 101 million dollars.
The group’s CEO, Ralph Mupita, referenced MTN Nigeria’s expense profile to highlight the need for tariff elevations as a measure to offset the high costs of maintaining networks.
MTN Group disclosed a decline in its headline earnings per share (HEPS), a principal profit measure, by 72.3% to reach 315 cents for the year that ended in December, down from a recast 1,137 cents the previous year. In the same vein, adjusted HEPS decreased by 9.5% to 1,203 cents.
Earlier, the Central Bank of Nigeria took the decision to implement new forex regulations in June, which resulted in the naira devaluating by about 96.7% according to MTN’s claim, as of December. Simultaneously, the National Bureau of Statistics announced an increase in Nigeria’s annual inflation rate to 28.92% in December 2023, an increase from 28.20% the previous month.
MTN Nigeria’s chief executive officer, Ralph Mupita, disclosed that the company is in negotiation talks with cell tower operators, among which are IHS Holding Ltd. and ATC. The purpose of these talks is to pull back on further cost increases that are likely to manifest as a result of future devaluations of the naira. The need for these discussions arises from the fact that a sizable portion of network expenditure is linked to contracts with these operators.
In January, MTN announced that it incurred a pre-tax loss of 177.8 billion naira. This significant loss was attributed to an extensive foreign exchange loss, which skyrocketed from 81 billion naira in 2022 to an overwhelming 740 billion naira.
Regardless of the challenges faced in 2023, MTN Group reported a substantial increase in both their revenue and the number of subscribers. The recorded growth in revenue was 13.5%, amounting to R210 billion, equivalent to $11 billion. The increase in revenue was significantly boosted by data revenue totaling R84 billion ($4.4 billion), voice revenue amounting to R83 billion ($4.3 billion), as well as the revenue from MTN MoMo, the company’s fintech division, which came in at R21 billion ($1.11 billion).
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