MTN Nigeria and Airtel Africa: Projected Profitability by 2025…

MTN Nigeria and Airtel Africa are projected to regain profitability by 2025 following significant FX losses due to naira devaluation. In FY 2024, MTN recorded over N925 billion in FX losses, while Airtel saw a reduction to $153 million. Both companies are implementing strategies to mitigate risks and reduce costs, suggesting a positive market recovery ahead.

The telecommunications landscape in Nigeria is set for a notable turnaround, with MTN Nigeria and Airtel Africa Plc anticipated to regain profitability by 2025, as stated by CSL Stockbrokers Limited. This recovery follows significant foreign exchange (FX) losses attributed to the devaluation of the Nigerian naira, which adversely affected the operators’ financial stability.

In the fiscal year 2024, MTN Nigeria experienced a staggering over N925 billion in FX losses, undermining its balance sheet. Meanwhile, Airtel Africa reported a decrease in FX losses, down to $153 million from $903 million in the preceding year’s nine-month financial results. Analysts at CSL are optimistic, asserting, “Looking ahead, we believe the worst is over for telecom operators, and we expect them to return to profitability in 2025.”

The performances in Nigeria’s telecommunications sector varied in 2024. MTN Nigeria demonstrated robust growth, with a 36.0% year-on-year revenue increase, reaching N3.36 trillion, compared to N2.47 trillion in 2023. In contrast, Airtel Africa experienced a 5.8% decline in revenue, falling to $3.66 billion amid significant currency devaluations impacting key markets like Nigeria and Malawi.

The regulatory filings indicated that MTN’s impressive revenue growth was primarily driven by a 49.1% increase in data revenue and a 14.5% rise in voice revenue. Conversely, Airtel marked a decline in both data and voice revenues due to currency issues. Analysts noted that the telecom operators are struggling with surging operational costs caused by inflation and rising energy prices, challenging their profitability.

For MTN Nigeria, Direct Network Operating Costs increased sharply by 88.1% year-on-year to N1.23 trillion in FY 2024. Airtel, however, demonstrated efficiency with a slight 1.1% reduction in costs, bringing Direct Network Operating Costs down to $708 million in 9M 2025. Currency devaluation continues to be a significant challenge, with FX losses profoundly impacting both companies.

To counteract FX exposure, MTN renegotiated lease agreements with IHS and ATC, shifting to primarily Naira-based terms. These agreements were structured to alleviate dollar dependency, thus reducing losses significantly. Analysts noted that,
“The revised leases are now primarily Naira-based, with a minimized US dollar-linked portion…” Additionally, MTN reported a quarterly transition to profitability, reflecting a recovery from a substantial loss the previous year.

Airtel Africa also reduced its FX losses significantly through the localization of foreign debt, thus improving its financial standing with a report of a net profit of $248 million for 9M 2025—an impressive recovery compared to the previous year. In conclusion, CSL attributed the positive outlook to factors such as recovery in mobile subscriptions, tariff hikes, and network expansions.

In summary, MTN Nigeria and Airtel Africa are on track to return to profitability by 2025, following significant adjustments to mitigate FX exposure and operational efficiencies. The telecommunications sector faces ongoing challenges linked to currency devaluation, but strategic measures undertaken by both companies indicate a promising recovery trajectory. Positive trends in mobile subscriptions, pricing adjustments, and technological advancements further support this optimistic outlook.

Original Source: dmarketforces.com