MTN Nigeria and Airtel Africa are expected to return to profitability by 2025 after facing significant FX losses due to naira devaluation. MTN reported substantial revenue growth, while Airtel faced declines. Both companies are implementing strategies to mitigate FX exposure and improve profitability.
MTN Nigeria and Airtel Africa Plc, two prominent telecommunications companies listed on the Nigerian Exchange (NGX), are projected to return to profitability by 2025. This projection aligns with the firms’ responses to significant foreign exchange (FX) losses due to the devaluation of the Nigerian naira, which have adversely impacted their balance sheets. MTN Nigeria reported over N925 billion in FX losses for the financial year 2024, disrupting its financial stability. Conversely, Airtel Africa noted $153 million in FX losses for the nine months ending in 2025, a marked reduction from the $903 million incurred the previous year.
In 2024, MTN Nigeria demonstrated notable revenue growth, achieving a 36% year-on-year increase to N3.36 trillion, compared to N2.47 trillion the prior year. However, Airtel Africa faced declining revenues, recording a 5.8% decrease in its 9-month 2025 results, dropping from $3.88 billion to $3.66 billion. Analysts from CSL Stockbrokers Limited attribute this revenue decline primarily to significant currency devaluations across key markets, including Nigeria, Malawi, and Zambia.
Analysts have observed a rising trend in operational costs within Nigeria’s telecommunications sector, driven by high inflation, increased energy prices, and ongoing currency devaluation, all contributing to significant profitability pressure. For instance, MTN Nigeria’s Direct Network Operating Costs rose by 88.1% year-on-year to N1.23 trillion in FY 2024, up from N655.2 billion in FY 2023. Conversely, Airtel Africa managed to slightly decrease its Direct Network Operating Costs by 1.1%, reducing them to $708 million from $716 million year-on-year in its 9-month results.
FX losses have been a significant challenge for telecom operators in Nigeria, especially for MTN Nigeria, which recorded N925.36 billion in FX losses in 2024. To mitigate these losses, MTN has renegotiated its tower lease agreements with IHS and ATC for more favorable, Naira-based terms, minimizing reliance on the US dollar. The firm’s strategic adjustments contributed to a return to quarterly profit in Q4 2024, reporting N114.49 billion compared to a loss of N454.60 billion in the same quarter the previous year.
Airtel Africa has also localized its foreign debt as a measure to reduce FX exposure, leading to a decrease in FX losses to $153 million in 9M 2025, down from $903 million in the prior year. This shift has facilitated a remarkable net profit of $248 million for Airtel, a stark contrast to the $2 million profit recorded in the same period in 2024. CSLSB remains optimistic about the sector’s future, citing recovery in mobile subscriptions, tariff increases, and advancements in network infrastructure as contributing factors.
In summary, MTN Nigeria and Airtel Africa are anticipated to achieve profitability by 2025 following strategic adjustments to mitigate the impacts of foreign exchange losses from the devaluation of the Nigerian naira. While MTN experienced significant revenue growth, Airtel has worked to manage decreasing revenues more efficiently. The ongoing operational cost challenges due to inflation and currency fluctuations make profitability a focus for these telecom operators moving forward.
Original Source: dmarketforces.com
