MTN Nigeria Crosses N5trn As Tariff Hike Expectation Attracts Investors 

MTN Nigeria Plc.’s market value has continued to increase as tariff hike expectations draw investors’ attention to the telecom stock. In the equities market on Thursday, MTN Nigeria share price climbed by 10% to N242.

The telecom company’s market value increased to N5.08 trillion on the back of gaining streaks that started midweek.

The telecom regulator and the Nigerian government are in the process of agreeing to a rate hike for telecom operators amidst rising inflation and weak local currency.

Negative macroeconomic indicators have impacted the balance sheet quality of telecom operators. Analysts said payroll expenses have surged significantly in the recent time.

MTN Nigeria share price nosedived from its 52-week high to trade around N170 range in 2024. With massive price decline, some equities analysts have remained bullish, noting its strong upside potential following the decision to localize debt.

The group’s financial position was affected by losses sustained as a result of huge FX liabilities. When the naira was devalued, MTN Nigeria’s exposure to US dollar-priced deals caused its shareholder fund to decline significantly.

Telcos have submitted a proposal to the regulator, requesting a 100 percent hike in telecom tariffs. The proposal is currently awaiting the final nod from the NCC, which has yet to decide on the matter.

The operators, a major contributor to Nigeria’s economy, argued that this hike is necessary to offset rising operational costs, including increasing fuel prices and the depreciation of the naira.

Telecom players have agreed to channel the revenue from the proposed 100 percent tariff increase into major upgrades in network infrastructure and service quality