MTN Nigeria and Airtel Africa are predicted to regain profitability by 2025 after suffering substantial FX losses due to Naira devaluation. MTN recorded over N925 billion in losses, while Airtel reduced its losses from $903 million to $153 million. Both companies are making strategic adjustments to improve their financial health, influenced by a growing demand for mobile services and network expansions.
MTN Nigeria and Airtel Africa Plc are anticipated to regain profitability in 2025 after suffering significant foreign exchange (FX) losses due to the devaluation of the Nigerian naira. MTN Nigeria faced over N925 billion in FX losses for the financial year 2024, which adversely affected its financial stability. In a similar vein, Airtel Africa recorded $153 million in FX losses as of the end of the nine-month financial year 2025, a notable decrease from $903 million in the previous year, according to CSL Stockbrokers Limited.
In 2024, the performance across Nigeria’s telecommunications sector was mixed. MTN Nigeria maintained a strong revenue growth, with a 36% increase year-on-year, achieving N3.36 trillion, in contrast to its rival Airtel Africa, which experienced a 5.8% revenue decline, falling to $3.66 billion. Analysts note that currency devaluations in major markets heavily influenced Airtel’s unfavorable performance during this period.
MTN Nigeria’s notable revenue growth primarily stemmed from increases in data and voice revenues, which rose by 49.1% and 14.5% year-on-year, respectively. Conversely, Airtel Africa’s data and voice revenues saw significant declines due to adverse currency influences, contributing to overall financial strain.
The telecommunications sector in Nigeria faces elevated operational costs caused by inflation, soaring energy prices, and currency devaluation. Particularly, MTN Nigeria reported an 88.1% surge in Direct Network Operating Costs, amounting to N1.23 trillion in FY 2024. Meanwhile, Airtel Africa managed a slight reduction in operating costs by 1.1%, achieving $708 million in the same period.
Analysts have pointed to currency devaluation as a critical challenge for telecom operators. MTN Nigeria’s substantial FX losses pushed it to renegotiate tower lease agreements with IHS and ATC, achieving more favorable, Naira-based terms. These adjustments contributed to a quarterly profit of N114.49 billion in Q4 2024—a significant recovery from the previous year’s loss.
Airtel Africa also localized its foreign debt, sharply reducing its FX losses, thus reporting a net profit of US$248 million, a considerable improvement from US$2 million in 9M 2024. CSL Stockbrokers highlighted factors driving positive forecasts, including growth in mobile subscriptions, tariff increases, the rollout of 4G and 5G networks, enhanced broadband penetration, and shifts from analog to digital business models.
In summary, both MTN Nigeria and Airtel Africa are expected to return to profitability in 2025 following substantial losses from FX fluctuations. MTN has made strategic modifications to mitigate these risks, which have already started showing results in improved quarterly profits. Similarly, Airtel’s efforts to localize debt have significantly bolstered its financial position. The outlook for the telecommunications sector appears optimistic as local operators adjust to the prevailing economic challenges and explore new growth opportunities.
Original Source: dmarketforces.com
