The telecommunications giant last rewarded shareholders in 2023, but a strong rebound in earnings and operations is clearing the way for a payout in the 2025 financial year. 

MTN’s negative equity, which stood at ₦458 billion at the end of 2024, has reduced to ₦42.51 billion by mid-2025 and Analysts project that the figure will turn positive in the third quarter, an important step towards dividend reinstatement.

The record of strong payout ratios for MTN Nigeria, coupled with recent comments from MTN Group President Ralph Mupita about a possible public offer after dividend resumption, has further enhanced expectations.

Explosive data growth and the full impact of tariff increases, which took effect in the second quarter, are huge contributors to this. In that period, data revenue soared 85.6% year-on-year to ₦701 billion, up from ₦377 billion a year earlier. 

Across the first half, MTN earned ₦1.22 trillion from data sales, supported by an increase in active users to 51 million and a 21.1% jump in average data consumption to 13.2GB per user.

Data now accounts for 51.7% of total revenue, increasing from 47.2% a year earlier, and is projected to hit 53% by year-end. Voice revenue also has a 40% growth forecast for 2025 despite competition from OTT alternatives like WhatsApp calls.

The recovery is also showing in profitability as MTN posted a half-year net income of ₦414.9 billion, a 179.9% increase compared with last year. Its EBITDA margin climbed to 50.6% in the first half, up from 35.6% in the same period of 2024. 

Management attributed the improvement to a more stable naira and cost savings from renegotiated tower lease agreements.

Again, net operating cash flow surged 79.2% year-on-year to ₦955.68 billion in H1 2025, even after huge capital spending and debt repayments. First-half CAPEX surged 288.4% year-on-year to ₦565.67 billion, pushing CAPEX intensity to 23.8%. 

The company plans to invest an average of ₦1.34 trillion annually over the next five years to support revenue growth of nearly 27% per year. 

While this front-loaded spending will ease in the second half, analysts say it underlines MTN’s goal to strengthen its network and expand services.

After a difficult 2024, when the share price slid 24% to end the year at ₦200, MTN’s stock has staged an interesting recovery. Starting 2025 at ₦200, it surged to ₦250 by January-end, gathered further pace in June, and delivered a 32% gain in July alone. 

As of early August, the shares trade at ₦480, a 140% year-to-date return and a market capitalisation above ₦10 trillion, making MTN only the second company on the Nigerian Exchange to hit that milestone after Dangote Cement.

CardinalStone has maintained a “Hold” rating on the stock, with a target price of ₦526.94 for 2025. Cordros Capital projects a dividend per share of ₦17.19, offering a yield of about 7% at current prices.

With data-led growth, expanding fintech operations, and continued network investment, analysts believe MTN is well placed to sustain its momentum. “Positive outlook affirmed for telco bellwether,” CardinalStone wrote in its August 6 report.

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It is an important acknowledgement that if we can create the conditions within which innovation can thrive, we can maintain, or even accelerate the already rapid growth in the digital economy.

Since the liberalisation of the telecoms sector in the early 2000s, the ICT sector’s contribution to GDP in Nigeria has grown progressively.

Today, it delivers 17.89% of annual GDP. That is more than double the contribution of oil and gas. From the initial development of connectivity infrastructure and services, the sector has catalysed the emergence of innovative technology businesses across a range of sectors. From financial technology, to data, logistics, transportation, healthcare and education.

It also provides the infrastructure that enables the delivery of critical national development projects, from national identity enrollment and management, to elections and financial inclusion programmes that provide access to vital services for marginalised and vulnerable communities.

While this growth is impressive and the impact on socio-economic development so far has been clear, the journey is far from over.

The recognition within the renewed hope agenda is that the sector has the potential to drive a new wave of inclusive economic development that can be the foundation of Nigeria’s economy for decades.

To deliver this, the government has clearly and publicly acknowledged the importance of creating an enabling environment for investment and taken a number of bold steps to address investment bottlenecks. From the tough decisions to unify the exchange rates, to the tightening of monetary policy and a focus on reviewing the tax regime to make it smoother and more efficient.

They have also created target investment funds to support key sectors of the economy, from healthcare and agriculture to the small businesses that drive the economy.

The specific role of the digital economy is captured in the Federal Ministry of Communications, Innovation and Digital Economy’s 4 year 2023-27 growth plan, which envisages a further 15% increase in  the contribution of the ICT sector to GDP growth, as well as 15% YoY increases in investment in the sector, both of which are projected to support a 100% increase in the annual net revenue that the sector delivers to government.

These are laudable and ambitious objectives, but they are impossible to achieve without deliberate sustained strategic and tactical action. If these actions are not taken, then the foundations that have been built are vulnerable and not only will these objectives be missed, but the industry will stagnate.

If you look carefully at the investment trajectory in the telecoms industry you can see two clear and concerning trends, which are being further exacerbated by the recent short term economic shocks.

Between 2021 and 2022 industry CAPEX declined by 30.37% while industry Foreign Direct Investment declined by 46.9%.

This happened at a time when operational expenses have surged and it has been exacerbated more recently by rising interest rates increasing the cost of debt. What that means is that industry expenditure has been diverted from capital (expansion and growth) to operations and that the investment environment has deteriorated.

The ultimate manifestation of this has been the recent losses declared by major operators for FY 2023 and HY 2024.

This is further exacerbated by the multiple taxation ecosystem that continues to exist across Nigeria, with operators exposed to 54 different federal/state/local government taxies or levies, many of which are technically illegal.

There is a perception that the telecoms industry is highly profitable and so can be treated as a ‘cash cow’ – we are now seeing the impact of this, and even though it is clear operators are suffering, more new taxes continue to be considered by the national assembly.

This is a critical moment. It is an inflection point. If we act, we can establish the platform for growth and the delivery of the government’s ambitious objectives.

If we delay, or fail to take the decisions necessary, then the industry is likely to go in the wrong direction. This will not only damage the interests of investors, many of whom are Nigerian, but also impact the emergence of the innovative services and products that ride on telecoms infrastructure.

We believe that decisive action can turn this moment from a crisis into an opportunity.

Following extensive research, the Association of Licensed Telecom Operators of Nigeria (ALTON), has developed a clear set of recommendations that can catalyse the next wave of growth in the industry, and for Nigeria.

These are:

1. Take immediate action on retail pricing: In the short term, this means an industry wide increase to retail tariffs, which were last reviewed in 2016, when the exchange rate was N373/$ and inflation at 18.4%. No industry can survive indefinitely in a rapid inflation environment and not be allowed to increase retail prices. Regulators have denied all recent requests, despite approvals being granted in other critical industries from power to fuel and transportation.
2. Make industry pricing sustainable: Every price increase requires individual pre-approval from the regulator, which continues to use 2016 pricing guidance. This is an outdated regulatory model that is not representative of global best practice.  ALTON recommends the implementation of a general authorization regime for tariff administration under which the NCC sets general pricing principles and requirements and operators independently align their tariffs with the set pricing requirements through self-certification, eliminating the need for prior approval.
3. Provide concessionary funding to enable CAPEX investment: To continue to drive investment and growth in infrastructure, the industry needs access to concessionary finance. Establishing a dedicated financing facility will help mitigate the impact of recent interest rate increases and enable more investment.
4. Build and expand regulatory capacity: With technology driving rapid change, we need to rapidly upskill the sector’s regulators to ensure the implementation of well structured regulation that provides the right balance between protection and investment incentive. Regulations need to be co-developed more constructively with industry on a regular basis.

If we can deliver each of these things, then we will have established the basis for long-term sustainable growth in the telecoms sector, and through it catalyse dynamic growth in Nigeria’s broader digital economy. This is achievable, and the time is now.

*Engr. Adebayo is the Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON)

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