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Business Insider
5 days ago
- Business
- Business Insider
Internet usage in Nigeria dips as tariff cost spikes
Nigeria's telecommunications sector has faced its fair share of complications over the last year. From loss projections to tariff hikes, the country's economic challenges appear to be creating a ripple effect. The Nigerian telecommunications sector has endured economic challenges, prompting tariff increases and impacting data usage. Internet utilization fell from January to April 2025, attributed to a 50% hike in data tariffs instituted in February. Telecommunication companies like MTN Nigeria reported solid revenue growth despite reduced data consumption among citizens. According to recent data given by the Nigerian Communications Commission, total internet usage decreased from 1,000,930.60 terabytes in January to 983,283.43 terabytes in April, marking a 1.76 percent fall over the three months. The dip in data usage is a result of the NCC's decision to increase data tariffs by 50%. Some of the rough estimates show that under the revised pricing, the 1.8GB monthly plan now costs ₦1,500, replacing the previous 1.5GB plan that was priced at ₦1,000. The 20GB plan has increased to ₦7,500 from ₦5,500, while the 15GB plan now costs ₦6,500, up from ₦4,500. Larger data bundles have seen even steeper increases. The 90-day 1.5TB plan has jumped from ₦150,000 to ₦240,000, while the 600GB 90-day plan has risen from ₦75,000 to ₦120,000. These price jumps, since it was implemented back in February, have resulted in less data usage as Nigerians struggle with an economy that has triggered inflationary pressures across multiple sectors. This dip in usage is also notwithstanding the fact that in April, the top telecommunications company in the country, MTN Nigeria, recorded revenue of N1 trillion in the first quarter of 2025, marking a 40.5% year-on-year increase from the N752.9 billion posted in Q1 2024. Data analyzed, as seen in the Punch, month-over-month, reveals a dramatic decline in utilization just after the fee was implemented. The amount of internet usage in February was 893,054.80 terabytes, which was 10.8% less than in January. March's figures rebounded to 995,876.10 terabytes, while in April, data usage dropped by 12,592.67 terabytes. Major telecom operators in Nigeria, including MTN, Airtel, and 9Mobile, have long lobbied for price modifications to reflect economic reality. Despite rising operating expenses caused by inflation, telecom companies have been unable to raise prices for more than a decade. This, however, has not sat well with the country's general populace as they continue to suffer one of the country's worst economic hits, using the same inflationary concerns the telecom industry alluded to. By the end of 2024, when the conversations on tariff hikes were heating up, the country's inflation rate had climbed to 32.47%, from the 29.90% levels it began the year with. At the time, reports indicated that telecommunications operators could face a $11.3 billion revenue loss between 2022 and 2026, resulting from a delay in the tariff hikes, which had persisted for 11 years. In 2022, telecom firms had demanded a 40% tariff increase.
Business Insider
30-04-2025
- Business
- Business Insider
MTN Nigeria rakes in N1 trillion in Q1 2025 as tariff hike boosts revenue
MTN Nigeria recorded revenue of N1 trillion in the first quarter of 2025, marking a 40.5% year-on-year increase from the N752.9 billion posted in Q1 2024. MTN Nigeria recorded N1 trillion in revenue in Q1 2025, a 40.5% increase from Q1 2024. The company returned to profitability with a N133.7 billion profit after tax in Q1 2025, following a loss in the same period last year. MTN Nigeria added 3.2 million new users and 2.6 million active data users in Q1 2025, bringing the total subscriber base to 84.1 million and total active data users to 50.3 million. MTN Nigeria recorded revenue of N1 trillion in the first quarter of 2025, marking a 40.5% year-on-year increase from the N752.9 billion posted in Q1 2024. This strong performance was largely driven by a 50% tariff increase implemented in February 2025, though the full financial impact is expected to materialize in subsequent quarters. According to its unaudited Q1 2025 financial results, the telecom giant returned to profitability with a N133.7 billion profit after tax, a dramatic turnaround from the N392.7 billion loss recorded in the same period last year. This rebound signals a continued recovery from the financial distress triggered by the 2023 naira devaluation, which severely impacted profitability due to massive foreign exchange losses. The company has now recorded three consecutive quarters of profitability since June 2024, following a turbulent period marked by a N740 billion FX loss last year. In Q1 2025, MTN Nigeria managed to cut its realised FX losses by 66% and posted an unrealised foreign exchange gain of N55 billion, partly offsetting the N476.8 billion loss from the previous year. Telecom multinationals like MTN remain particularly exposed to exchange rate volatility due to their dollar-denominated operational and capital expenditures, a challenge that has persisted since the naira was floated. Speaking on the tariff increase, which uniformly applies to voice calls, SMS, and data plans, MTN Nigeria CEO, Karl Toriola, said: 'We commenced phased implementation of the new tariff structure in mid-February 2025 across our data and voice bundles, with the majority of adjustments taking effect in March. 'While the full impact on usage and revenue is expected from Q2, early indicators suggest continued resilience in customer demand, aided by our targeted CVM initiatives,' he added. Mr. Toriola also added a recent partnership with Airtel Africa on a passive infrastructure-sharing initiative in Nigeria. The collaboration is expected to improve network coverage and operational efficiency. Stronger margins, rising subscriber base Operational profitability also improved significantly, with EBITDA rising by 65.9%, and the EBITDA margin expanding by 7.2 percentage points to 46.6%, a key metric watched by investors. Investor sentiment has responded positively, with MTN's share price rebounding from last year's 24.24% year-to-date loss. As of April 29, 2025, the stock was trading at N240 per share, reflecting a 20% YTD gain.
