MTN Nigeria: 50% telecom tariff hike to reflect in Q2'25 results

MTN Nigeria, a leading telecom firm, is gearing up for the full impact of a 50 per cent tariff increase to reflect in its second quarter earnings. Modupe Kadri, the Chief Financial Officer of the company, shared insights on the delayed implementation of the tariff adjustment during a recent chat with CNBC Africa. Despite declaring a profit of 133.7 billion naira in the first quarter, Kadri noted that the results only partially captured the tariff hike's effects due to the implementation timeline. However, he expressed optimism about the visible signs of progress in the company's performance. Kadri highlighted the diverse revenue streams within the business, including data, voice, and the fintech arm, emphasizing strategies to enhance penetration and optimize earnings. In terms of the fintech sector, Kadri mentioned ongoing strategic initiatives aimed at maximizing the business's potential. Despite a reduction in subscribers, the fintech arm demonstrated improved earnings quality, showcasing MTN Nigeria's commitment to refining this segment. Moreover, the company witnessed robust growth in data service revenues, driven by high demand, as well as a notable contribution from voice services. Kadri acknowledged the market's appetite for products and services, underscoring the relevance of MTN Nigeria's offerings. Despite the tariff increments in February, with full implementation in March, MTN Nigeria observed a rise in data revenue. Kadri attributed this resilience to a product optimization program initiated by the Nigerian Communications Commission (NCC), which streamlined offerings and paved the way for tariff adjustments. As the company navigates the evolving regulatory landscape, Kadri projected a more substantial impact from the tariff hike to manifest in the second quarter results, scheduled for release in July. Additionally, Kadri delved into the firm's approach to mitigating foreign exchange (FX) losses, highlighting a strategic shift towards Naira-centric revenue operations. By minimizing exposure to forex fluctuations, MTN Nigeria aims to fortify its financial stability and sustain positive cash flows. Notably, the renegotiation of tariff agreements, such as the deal with IHS, exemplifies the company's concerted efforts to bolster profitability and operational efficiency. As MTN Nigeria forges ahead with its growth agenda, the CFO's insights shed light on the company's resilience amidst industry dynamics and regulatory changes. With a keen focus on optimizing revenue streams, mitigating FX risks, and enhancing operational agility, MTN Nigeria is poised to navigate the telecom landscape with strategic foresight and financial prudence.