MTN Nigeria (MTNN) saw its share price jump by nearly 10% on Tuesday following regulatory approval of a 50% tariff hike on Monday. The telecom giant’s shares closed at ₦256.30 ($0.16), marking their highest level since March 2024 and signaling a wave of investor confidence.
While MTN Nigeria surged, shares of rival Airtel Africa remained flat. Unlike MTN, Airtel Africa’s stock represents its operations across 14 African markets, meaning the tariff hike in Nigeria constitutes a smaller part of its overall business portfolio.
The tariff increase comes as telcos in Nigeria, including MTN and Airtel, grapple with significant foreign exchange (FX) losses due to the naira’s devaluation. In its Q3 2024 financial report released on October 30, 2024, MTN Nigeria reported a staggering nine-month FX loss of ₦514.9 billion ($331 million). Following the announcement, the company’s stock remained stable but dropped by 3.4% a week later, from ₦175 to ₦169, reflecting investor concerns over Nigeria’s tough economic environment.
The tariff hike, however, has sparked optimism among investors, who believe it will bolster MTN Nigeria’s revenue, allowing the company to offset FX losses and stabilize its financial position. Analysts predict the increased tariffs could help the company return to profitability as early as Q1 2025, positioning it for stronger growth in the months ahead.
The surge in MTNN’s share price underscores the market’s confidence in the company’s ability to navigate economic challenges and leverage regulatory support for future expansion.
