MTN contemplates tariff hike to regain $101 million in forex losses

March 27, 2024
2 min read
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  • MTN has revealed a partnership with regulators across several of its markets, including Nigeria, to get approval to raise tariffs for both voice and data to restore its profitability and strengthen its financial position.  
  • This comes after the telco reported a decline in full-year profit due to the naira devaluation, which made its biggest business, MTN Nigeria, incur a post-tax loss of ₦135 billion ($101 million).
  • Referencing the expense profile of the telco in Nigeria, the Group’s CEO, Ralph Mupita, shared that MTN needs some tariff increases to mitigate the cost of running the networks.

MTN Group revealed that its headline earnings per share (HEPS), one of the main profit measures, dropped by 72.3% to 315 cents for the year ended on December 31, from a restated 1,137 cents a year earlier, while adjusted HEPS declined by 9.5% to 1,203 cents.

Previously, the Central Bank of Nigeria implemented new forex regulations in June, which MTN claimed resulted in a nearly 96.7% devaluation of the naira as of December, while the National Bureau of Statistics announced that Nigeria's annual inflation rate increased to 28.92% in December 2023 from 28.20% in November. 

Mupita revealed that MTN Nigeria is in talks to renegotiate some contracts with cell tower operators, such as IHS Holding Ltd. and ATC, to reduce further cost increases brought on by potential naira devaluations. This is because the majority of network expenses stem from these agreements.

In January, the telco announced it recorded a ₦177.8 billion pre-tax loss due to a significant foreign exchange loss that increased from ₦81 billion in 2022 to ₦740 billion.

On the other hand, MTN Group reported a significant rise in revenue and subscriber rate despite a challenging 2023. Its revenue is said to grow 13.5% to R210 billion ($11 billion), with data revenue making up R84 billion ($4.4 billion), voice revenue contributing R83 billion ($4.3 billion), and MTN MoMo, its fintech revenue arm, totalling R21 billion ($1.11 billion).

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