MTN Nigeria and Airtel Africa Plc are anticipated to achieve profitability by 2025, following significant foreign exchange losses. MTN’s reported N925 billion in losses contrasted with Airtel’s reduction to $153 million. Both companies have strategized to mitigate FX exposure and manage costs effectively, leading to an optimistic recovery forecast for the telecommunications sector in Nigeria.
MTN Nigeria and Airtel Africa Plc, prominent telecom operators on the Nigerian Exchange, are projected to achieve profitability by 2025, following significant foreign exchange (FX) losses that have impacted their financial performance. MTN Nigeria reported over N925 billion in FX losses for the 2024 financial year, which substantially weakened its balance sheet.
Conversely, Airtel Africa recorded $153 million in FX losses for the first nine months of 2025, a sharp decrease from $903 million in the previous year. According to CSL Stockbrokers Limited, the negative impact of FX losses on the telecom sector is expected to ease, allowing operators to regain profitability in 2025.
Despite the challenges, MTN Nigeria experienced a 36.0% year-on-year revenue growth, totaling N3.36 trillion, driven predominantly by increases in data and voice revenues of 49.1% and 14.5%, respectively. In contrast, Airtel Africa saw a revenue decline of 5.8%, falling to US$3.66 billion, which has been attributed to issues stemming from currency devaluations across several key markets.
CSL’s analysis noted the rising operational costs in Nigeria’s telecom sector due to high inflation, increased energy prices, and currency depreciation. Specifically, MTN Nigeria’s Direct Network Operating Costs surged by 88.1% year-on-year to N1.23 trillion, while Airtel achieved a slight decrease of 1.1% in these costs.
To mitigate FX exposure, MTN renegotiated its tower lease agreements to adopt a more favorable structure, which included ties primarily to the Naira, thus reducing their vulnerability to foreign exchange variations. This strategic shift allowed MTN to significantly cut its FX losses in Q4 2024, achieving a profit of N114.49 billion, in stark contrast to a loss of N454.60 billion in the same quarter of the previous year.
Airtel has similarly localized its foreign debt, resulting in a reduction of FX losses and enabling a net profit of US$248 million in 9M 2025, a substantial recovery from the previous year’s mere US$2 million profit. CSL optimisticly attributes this positive trajectory to various factors including increased mobile subscriptions, tariff hikes, and the expansion of 4G and 5G networks.
In conclusion, MTN Nigeria and Airtel Africa are expected to return to profitability by 2025, thanks to strategies addressing FX losses and operational cost management. Despite past financial hurdles, these companies have implemented effective measures such as renegotiated lease agreements and debt localization, which have contributed to improved financial standings. Continued recovery in mobile subscriptions and expansion into new technologies support a promising outlook for the sector moving forward.
Original Source: dmarketforces.com
