Nigeria’s largest telecommunications service provider, MTN, is set to capitalise on its tariff increase and sustained subscriber growth to achieve an expected ₦4.9 trillion revenue in 2025. This is according to an equity research report by CardinalStone Partners Limited, an investment banking firm.
The report, informed by recent engagements with the company, revised the company’s full-year 2025 revenue projection upward from ₦4.8 trillion to ₦4.9 trillion. The growth is driven by stronger-than-expected impacts from tariff adjustments and resilient demand for voice and data services.
Despite Nigeria’s challenging economic climate, MTN Nigeria’s strategic initiatives and operational efficiencies position it as a linchpin in Nigeria’s ongoing digital revolution.
The company reported a stellar first quarter in 2025, with profit after tax surging 134% year-on-year to ₦133.64 billion, recovering from a ₦392.7 billion loss in Q1 2024.
This turnaround was underpinned by a 40.5% year-on-year revenue increase in Q1 25, reaching a significant milestone despite the tariff hike implemented only in the final two weeks of March 2025.
CardinalStone notes that the tariff adjustment, announced in February, had a minimal impact on Q1 results, with revenue growth primarily driven by increased minutes of use and megabits per user. The firm anticipates a more pronounced effect from the tariff hike in Q2 25 onwards, projecting a full-year revenue increase to ₦4.9 trillion.
Voice revenue, a critical segment for MTN Nigeria, rose by 27.7% year-on-year in Q1 25, fuelled by higher prices, relatively inelastic demand, and enhanced customer value management strategies. CardinalStone forecasts a 31.0% increase in voice revenue for FY’25, marking the segment’s strongest annual growth in over five years.
Data revenue, another key driver, is expected to surge by 68.2% in FY’25, compared to 48.7% in FY’24, propelled by a 50% tariff increase and continued conversion of voice-only subscribers to data users. Despite a moderation in data usage growth to 29.5% in Q1’25 from a 40.4% compound annual growth rate (CAGR) over the past five years, the tariff bump is expected to offset this slowdown, ensuring robust top-line growth.
MTN Nigeria’s EBITDA margin also expanded by 7.2 percentage points in Q1 25, reflecting strategic restructuring of foreign currency exposures and successful cost management. The 2024 renegotiation of tower lease agreements, which included discounted costs for 2025, further supports margin growth.
CardinalStone projects an EBITDA margin of 44.5% for FY’25, up from a prior estimate of 42.7% but slightly below Q1’25’s 46.6%. This forecast factors sustained cost efficiency programmes and the de-dollarisation of operating expenses, which mitigate the impact of Nigeria’s currency volatility.
These efforts underscore MTN Nigeria’s ability to maintain profitability despite high operational costs and macroeconomic shocks.
MTN Nigeria’s market leadership and strategic initiatives
With a subscriber base exceeding 75 million and a 40% market share, MTN Nigeria dominates the country’s telecommunications sector, outpacing competitors like Airtel Nigeria, Globacom, and 9mobile.
Its extensive network infrastructure spans urban and rural areas, supported by significant investments in 4G LTE expansion and preparations for a 5G rollout in select cities by 2026.
The company’s mobile money platform, MoMo, is a key growth driver, capitalising on Nigeria’s underbanked population of over 60 million adults. MoMo’s success in markets like Ghana and Uganda suggests significant potential for digital payments and microfinance services in Nigeria.
CardinalStone highlights MTN Nigeria’s focus on rural expansion, where mobile penetration remains below 50%, as a critical growth opportunity. The ongoing conversion of voice-only subscribers to data users, coupled with rising demand for enhanced mobile broadband and Internet of Things (IoT) applications, positions MTN Nigeria to leverage Nigeria’s digital demand surge.
The company’s 2019 listing on the Nigerian Stock Exchange has further solidified its status as a favourite among local investors, with a market capitalisation of $3.32 billion as of April 2025.
Despite its strong performance, MTN Nigeria faces significant challenges. Nigeria’s regulatory environment remains unpredictable, with past incidents like the $5 billion fine in 2015 for unregistered SIM cards (later reduced to $1.7 billion) serving as a reminder of compliance risks.
Recent mandates from the Nigerian Communications Commission (NCC) requiring operators to notify subscribers of service disruptions add to operational complexities.
Economic challenges, including repeated naira devaluations, inflate foreign currency-denominated costs, such as tower leases, which contributed to a $740 billion foreign exchange loss in 2024.
Competition is also intensifying, with rivals like Airtel Nigeria expanding aggressively, potentially pressuring MTN Nigeria’s pricing power.
CardinalStone’s key projections
The CardinalStone report assigns MTN Nigeria a “Buy” rating with a 12-month target price of ₦250 per share, implying a 15% upside from its current price of about ₦217.
This valuation is based on a discounted cash flow analysis with a weighted average cost of capital of 12%. However, the report’s credibility is tempered by disclosed conflicts of interest. CardinalStone acted as a lead arranger for a publicly disclosed securities offering by MTN Nigeria in the past 12 months and lists the company as a client, raising potential concerns about objectivity.
Notably, the analyst does not hold personal positions in MTN Nigeria’s stock, and the firm does not own significant equity or debt stakes in the company, providing some assurance of independence.
The report also notes that the analysts may not have visited MTN Nigeria’s operations in the past 12 months, and non-U.S. analysts are not subject to FINRA’s NASD Rule 2711 or NYSE Rule 472 restrictions, which could affect U.S. investors’ perceptions of the analysis.
CardinalStone’s transparency in these disclosures aligns with its regulatory obligations under Nigeria’s Securities and Exchange Commission, ensuring investors can critically evaluate the report’s findings.
Ultimately, MTN Nigeria’s robust Q1 25 performance, coupled with the anticipated impact of tariff adjustments, positions the company for significant growth in 2025. CardinalStone’s revised revenue forecast and optimistic margin projections reflect confidence in MTN Nigeria’s ability to navigate Nigeria’s economic challenges while capitalising on digital opportunities.
The company’s strategic focus on rural expansion, mobile money, and 5G rollout aligns with Nigeria’s broader digital transformation, promising new revenue streams and enhanced market leadership.
However, investors must remain vigilant about regulatory and macroeconomic risks. The disclosed financial ties between CardinalStone and MTN Nigeria warrant scrutiny, though the firm’s transparency mitigates concerns to an extent.
As CardinalStone’s lead analyst notes, “MTN Nigeria’s resilience and adaptability are proven, but its success hinges on navigating Nigeria’s unique challenges.” With strategic execution, MTN Nigeria is well-positioned to redefine connectivity in Africa’s most populous nation, making it a compelling opportunity for investors willing to navigate its risks.
