MTN Nigeria has sharply accelerated its capital expenditure in the first half of 2025, spending 208.2% more than the same period last year, as the telecoms operator pushes ahead with bold infrastructure investments to meet surging demand for data and digital services.
The company’s capex surge includes heavy deployment into network upgrades, fibre broadband rollout, and the development of its new $240 million Dabengwa Tier III Data Centre, the first phase of which launched in July and is set to become the largest in West Africa. MTN also added 240 4G sites and expanded its fibre-to-the-home network, all part of a strategy to expand capacity and ease network congestion amid rising user traffic.
Karl Toriola, MTN Nigeria’s Chief Executive Officer, said the first-half performance reflects “strong execution of strategic priorities,” including price adjustments and operational efficiencies, against a more supportive macroeconomic backdrop. “We are on track to restore our balance sheet to a positive net asset position by the end of Q3,” he added.
Economic and regulatory landscape eases
The economic outlook in Nigeria showed signs of stabilisation, with headline inflation easing to 22.2% in June 2025 and the naira holding steady at N1,530 to the US dollar. Foreign exchange liquidity has improved, and the Central Bank of Nigeria’s decision to hold the monetary policy rate at 27.5% helped anchor inflation expectations. These developments, Toriola said, contributed to stronger business performance and provided a conducive environment for long-term investment.
However, regulatory changes did have some impact. A directive introduced in the first quarter limited third-party SIM registrations to one per customer, slightly slowing gross mobile additions. MTN said it is responding by onboarding more strategic agents to regain subscriber momentum.
Strong top-line growth across segments
MTN Nigeria’s service revenue soared by 54.6% year-on-year, driven by double-digit growth in voice, data, fintech, and digital services. Data revenue grew by 69.2% amid a 41.2% jump in data traffic and rising smartphone penetration, now at 62.6%. Mobile subscribers rose to 84.7 million, with 3.8 million net additions in H1. Active data users also increased by 3.3 million to hit 51 million.
Voice revenue climbed 40.3%, aided by pricing adjustments and growth in the subscriber base, while digital services posted a 59.1% rise. MTN’s fintech business recorded a 71.8% jump in revenue, driven largely by its airtime lending service, Xtratime, and an expanded portfolio of advanced financial services.
Although the number of active mobile wallets declined 6.1% to 2.7 million compared to December 2024, the second quarter showed signs of recovery, adding 562,000 new wallets. Customer deposits, meanwhile, rose nearly fivefold in the same period.
Bottom line recovery amid improved efficiencies
The company’s profitability rebounded significantly from a loss of N519.1 billion in the first half of 2024 to a profit after tax of N414.9 billion in H1 2025. Earnings before interest, taxes, depreciation and amortisation (EBITDA) more than doubled to N1.2 trillion, with margins improving by 15 percentage points to 50.6%.
This financial turnaround was aided by cost efficiencies, including N114 billion in savings from renegotiated tower lease agreements and stable forex conditions, which saw net finance costs decline by 57.8%.
Depreciation and amortisation costs rose by 27.3%, largely due to lease-related right-of-use assets, while net forex losses narrowed dramatically from N887.7 billion to N5.2 billion.
Retained earnings improved to a negative N192.9 billion, from negative N607.5 billion in December 2024, and shareholder equity improved from negative N458 billion to negative N42.5 billion. The company reiterated its target to return to positive retained earnings and net assets by Q3.
Free cash flow up despite investment surge
Despite the substantial capex outlay, free cash flow improved by 18% to N409.8 billion, aided by disciplined capital allocation and stronger earnings. The company maintains a cash balance of N257.6 billion and has reduced its US dollar letter of credit obligations from $20.8 million to around $1 million, helping to limit foreign exchange exposure. Currently, 74% of MTN’s total debt is denominated in naira.
Ratings agency GCR affirmed MTN Nigeria’s national scale issuer ratings at AAA and A1+, upgrading the outlook to stable, citing its return to profitability and robust financial performance.
Shared value and ecosystem development
In alignment with its long-term growth agenda, MTN committed N3 billion to the Federal Ministry of Communications’ 3 Million Technical Talent (3MTT) Programme and launched a startup accelerator offering N100 million in grants, mentorship, and tech integration. These initiatives aim to deepen digital inclusion and nurture a resilient innovation ecosystem.
Outlook: guidance revised upward
On the back of strong first-half results and improving macroeconomic conditions, MTN has upgraded its full-year 2025 guidance. It now expects:
Service revenue growth of “at least low 50%”
EBITDA margin of “at least low-50%”
Capex intensity to moderate in H2, following the H1 acceleration
Free cash flow to improve further in the second half
Looking beyond 2025, the company targets average service revenue growth of “at least low-20%” and EBITDA margins between 53% and 55%, assuming inflation eases below 20% and the naira remains within the N1,600–N1,800/$ range.
While acknowledging potential headwinds, including regulatory changes and currency volatility, MTN said it remains confident in its strategy to deliver long-term shareholder value and drive inclusive digital progress across Nigeria.
“We remain focused on executing our growth strategy and creating a sustainable digital ecosystem that delivers shared value,” Toriola said.
