Operator group reaps the rewards of increased capex and controlled opex, as Nigeria transitions from balance sheet drag to growth driver
MTN Group reported a 10.4% rise in service revenue for Q1, with the group’s reported EBITDA increasing 23.1% year-on-year to R21.5 billion (€1.06 billion) – a 33% rise in constant currency.
Mupita was appointed to lead the group for a further five year term last December, despite criticism of his governance and the group suffering from Nigeria’s economic difficulties.
Nigeria drives profit
Just one quarter later, the group’s service revenue hit R47.4 billion (€2.33 billion) in the three months ended March 31, compared with R42.9 billion in the corresponding period the year before. In constant currency terms, revenue grew 19.8%, largely due to a 40.4% increase in Nigeria and 39.5% in Ghana. South Africa posted a 2.6% gain and Uganda 13.5%.
Also, the earnings before interest, taxes, depreciation and amortisation (EBITDA) margin improved to 43.6%, up from 38.3%. Nigeria led with a 49.2% rise in EBITDA, then Ghana at 22.7% and Uganda at 18.3%. South Africa’s EBITDA fell 2.4%.
A firm grip on operational costs helped profitability in the Nigerian market which is weathering tough macroeconomic conditions: they only increased by 4.2% to ₦408.7 billion (€227.8 million) compared to the 25% increase reported in Q1 last year. This was helped by renegotiated terms and conditions with IHS Towers and other cost-cutting drives.
Another major factor was that in January 2025, the Nigerian Communications Commission (NCC) approved a proposal to raise tariffs on voice and data services after they had been static for 11 years. Operators justified the rise as being necessary to offset unfavourable foreign exchange rates and inflationary pressure.
In its earnings report, MTN said the increase allowed it to boost investments spending ₦202.4 billion ($125.7 million) on capital expenditure in Q1, an increase of 159% year-on-year.
Service revenues and capex
Data revenue increased 17.9%, or 28.7% in constant currency, supported by a 9.1% increase in active data users to 161.7 million. Data traffic rose 30.4% to 5,677 petabytes.
Voice revenue was down 0.1% in reported terms, but up 9.8% in constant currency.
In contrast, revenue from financial services grew by 17.2%, or 25.2% in constant currency, with transaction volume up 13.9% to 5.5 billion and transaction value up 48.9% to $95.3 billion. Monthly active users for MTN’s Mobile Money rose 1.1% to 62.2 million.
Capital expenditure increased to R12.0 billion from R9.0 billion a year earlier. Excluding leases, capex was R7.5 billion. Capex intensity, which excludes leases, rose to 15.2% from 11.8%.
Last month Mupita (pictured) was elected to the GSMA board of directors and will serve as its deputy chair for the 2025-2026 period.
