MTN Nigeria has released its financial results for the nine months ending September 30, 2024, revealing a substantial post-tax loss of ₦514.9 billion. This stark contrast to the ₦14.9 billion profit from the same period in 2023 underscores the financial impact of regulatory and economic pressures.
Subscriber Base and NIN-SIM Directive Impacts
MTN Nigeria reported a 0.9% drop in its subscriber count, now at 77.0 million, primarily due to Nigeria’s National Identification Number-SIM (NIN-SIM) registration mandate. This directive led to the loss of 64.3 million subscribers across the Nigerian mobile industry, though MTN and Airtel have managed to retain their lead in market share.
Revenue Growth Amid Decline in Active Wallets
Despite subscriber challenges, MTN Nigeria recorded a 33.6% rise in service revenue and an 18.0% increase in fintech revenue. However, active mobile money wallets under MoMo PSB (Payment Service Bank) declined by 21.8%. MTN Nigeria has focused on improving its fintech services, upgrading the MoMo PSB app, and refining wallet quality. In August 2024, MTN acquired a 7.17% minority stake in MoMo PSB from Acxani Capital, making it a fully-owned subsidiary. By October, MoMo PSB launched an inbound remittance service to bolster its financial offerings.
Addressing Profitability Challenges
During this period, MTN Nigeria’s EBITDA dropped by 5.3% to ₦860.2 billion. The company attributed the decline to the naira’s depreciation, inflation, and higher energy costs. To manage these expenses, MTN renegotiated its tower lease agreements with IHS Towers, introducing an energy cost component tied to diesel prices. Additionally, MTN received approval to generate 15.94 MW of electricity across four captive power plants in Lagos, a strategic move aimed at reducing energy costs and enhancing operational efficiency.
Industry-Wide Energy and Cost-Saving Efforts
Airtel Africa, another major telecom provider in Nigeria, is similarly navigating operational costs and sustainability goals. Airtel recently renewed its tower lease agreements with American Tower Corporation (ATC) and is pursuing renewable energy solutions to minimize reliance on diesel, further reflecting the telecom sector’s shift toward energy efficiency.
Focus on Subscriber Recovery and Tariff Adjustments
In the final quarter of 2024, MTN Nigeria aims to rebuild its subscriber base following the NIN-SIM directive. The company is also actively seeking regulatory support for tariff adjustments to improve profitability. CEO Karl Toriola highlighted the critical need for increased tariffs, warning, “If the tariff doesn’t go up, the telco will shut down.” His statement underscores MTN’s commitment to sustaining operations and the necessity of tariff adjustments amid Nigeria’s economic challenges.
Outlook
MTN Nigeria’s strategic focus on subscriber recovery, tariff adjustments, and cost control through energy initiatives reflects its commitment to navigate economic challenges and maintain its industry position. The upcoming quarter will test the effectiveness of these measures in stabilizing and advancing MTN Nigeria’s financial health.
Source: InnovationVillage