MTN Nigeria’s share price surged by 9.87% on Tuesday, closing at ₦256, following regulatory approval of a 50% increase in telecom tariffs.

This marks the company’s highest share price since March 2024, when it traded at ₦267.80. The price jump reflects renewed investor confidence in MTN’s profitability prospects after enduring two years of financial losses.

Rival Airtel Africa, however, saw its stock price remain stable at ₦2,159, indicating the limited impact of the Nigerian tariff adjustment on the company’s broader valuation. Airtel Africa’s stock performance is tied to its operations across the continent, diluting the influence of changes in individual markets like Nigeria.

The tariff hike, approved by the Nigerian Communications Commission (NCC), comes at a critical time for MTN Nigeria.

The company has been grappling with a challenging macroeconomic environment, including the naira devaluation and soaring inflation. These factors contributed to a sharp 59.2% decline in profits, with the telco reporting a ₦514.9 billion loss after tax in the first nine months of 2024.

The NCC’s tariff approval has provided a much-needed lifeline for MTN Nigeria. The increase in tariffs is expected to cushion the impact of adverse economic conditions and improve the company’s profitability. Following the December 2024 announcement that the NCC was set to approve the long-awaited tariff hike in January 2025, MTN’s stock price jumped 9%, signaling market optimism about the company’s recovery trajectory.

MTN Nigeria is actively pursuing strategies to restore its balance sheet and sustain its operations. One such strategy is raising fresh capital. On January 17, 2025, the telco announced it had secured an additional ₦42.20 billion through commercial paper issuance, a move aimed at boosting liquidity and financing ongoing projects.

Despite the challenging economic environment, MTN Nigeria has highlighted its operational resilience and agility. In its Q3 2024 earnings report, CEO Karl Toriola expressed confidence in the company’s long-term growth prospects, stating, “In the first nine months of 2024, we sustained the growth in our underlying operating performance – underpinned by our resilient business model and operational agility – despite challenging conditions.”

The company has also indicated that the tariff hike will provide additional resources to enhance network quality and expand infrastructure, further supporting its recovery.

While MTN Nigeria’s share price has shown significant recovery momentum, the company remains focused on addressing lingering challenges. These include macroeconomic headwinds and competition within the telecom sector.

For Airtel Africa, the lack of significant movement in its stock price suggests a more diversified risk profile, as its valuation is tied to operations in multiple African markets.

The NCC’s decision to approve the tariff hike signals recognition of the pressures facing the telecom industry, as companies strive to balance affordability for consumers with the need for sustainable operations.