Telecom Rally Adds N5.67tn To MTN, Airtel On Earnings Optimism

Nigeria’s two largest listed telecommunications companies, MTN Nigeria Plc and Airtel Africa Plc, added a combined N5.67tn to their market capitalisation within the first 10 trading days of the second half of 2026, defying a broad sell-off on the Nigerian Exchange Limited (NGX) that erased gains across several blue-chip stocks in the last month of first half of the year.

The sharp appreciation in both telecom stocks underscores growing investor confidence in the sector, driven by expectations of stronger earnings following the Nigerian Communications Commission’s (NCC) approval of a 50 per cent tariff adjustment and robust first-quarter financial performances by both operators.

Analysis by THE WHISTLER showed that the combined market value of MTN Nigeria and Airtel Africa rose from N34.04tn at the beginning of trading on July 1 to N39.71tn at the close of trading on July 10, representing a gain of N5.67tn, or approximately 16.7 per cent, within the period.

The rally came despite heightened profit-taking on the NGX, where investors continued to offload shares in several banking, consumer goods and industrial stocks following months of sustained gains.

Airtel Africa accounted for the larger share of the increase

The company’s share price climbed from N4,794 to N5,801.40, lifting its market capitalisation from N18.02tn to N21.80tn, translating to a gain of about N3.78tn, or 21 per cent, in just 10 trading days.

MTN Nigeria also recorded strong gains, with its share price rising from N720 to N810 during the same period.

The appreciation pushed the company’s market capitalisation from N15.12tn to approximately N17.01tn, adding N1.89tn, representing a 12.5 per cent increase.

The rally reflects renewed investor appetite for telecom stocks after years of margin pressure caused by rising operating costs, foreign exchange volatility and regulated pricing.

Market analysts attribute the renewed optimism to the NCC’s decision to approve a 50 per cent tariff adjustment—the first major pricing review in years, which is expected to significantly improve industry profitability and strengthen operators’ capacity to invest in network expansion.

The regulator said the tariff review was necessary to address mounting operational costs confronting telecom operators, improve service quality and ensure the long-term sustainability of the industry.

The positive market sentiment has also been reinforced by impressive earnings released by both operators, indicating that demand for voice, data and digital financial services remains resilient despite broader macroeconomic challenges.

MTN Delivers Strong Earnings Recovery

MTN Nigeria posted one of its strongest quarterly performances in recent years after reporting a profit after tax of N355.5bn for the first quarter of 2026, more than double the N133.7bn recorded in the corresponding period of 2025.

The result marked a significant turnaround from the losses reported during the peak of Nigeria’s foreign exchange crisis in 2024.

The telecom operator recorded service revenue of N1.49tn, representing 41.8 per cent year-on-year growth, while total revenue rose to N1.50tn for the three months ended March 31, 2026.

The performance was largely driven by accelerating demand for mobile data and expanding digital financial services.

Data revenue surged 56.2 per cent to N827.2bn, accounting for more than half of total service revenue.

Active data subscribers increased 9.5 per cent to 55 million, while average monthly data usage per customer rose to 14.3GB from the previous year as smartphone penetration expanded to 66.2 per cent.

Voice services remained a major revenue contributor, growing 22.5 per cent to N499.1bn, supported by subscriber growth and pricing adjustments.

Overall, MTN added 2.3 million new subscribers during the quarter, bringing its customer base to 89.5 million.

Its fintech business also emerged as a key growth engine.

Revenue from digital financial services increased 77.9 per cent to N64.2bn, although growth was temporarily affected by regulatory changes governing digital lending.

During the quarter, the company suspended its Xtratime airtime and data credit service following the implementation of the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025.

MTN said it has commenced onboarding approved lending partners and expects to resume the service once regulatory requirements are fully met.

The company also announced plans to strengthen its fintech operations through a N152.1bn capital injection by MTN Group Fintech Holdings B.V.

Under the proposed restructuring, the parent company will acquire a 60 per cent stake in MoMo Payment Service Bank and Y’ello Digital Financial Services, while MTN Nigeria will retain 40 per cent ownership.

The transaction, valued at N95.5bn on a debt-free basis, is expected to strengthen the fintech business while reducing MTN Nigeria’s future funding obligations.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 68.1 per cent to N828.3bn, while EBITDA margin expanded to 55.3 per cent from 46.6 per cent a year earlier.

Free cash flow rose 55.6 per cent to N326.5bn, even as capital expenditure almost doubled to N390.3bn, reflecting accelerated investment in network infrastructure.

Commenting on the results, MTN Nigeria Chief Executive Officer, Karl Toriola, said the company maintained strong commercial momentum through disciplined cost management and sustained investment in network capacity to support rising customer demand.

Airtel Africa Delivers Record Revenue Growth

Airtel Africa also reported its strongest financial performance to date, reinforcing investor confidence.

The telecommunications group posted revenue of $6.42bn for the financial year ended March 31, 2026, representing 29.5 per cent growth in reported currency and 24 per cent growth in constant currency.

Growth was driven primarily by Nigeria, where revenue increased 47.5 per cent in constant currency, while Francophone Africa recorded 17.1 per cent growth.

East Africa contributed $2.19bn in revenue, representing an 18.9 per cent increase.

Data services continued to drive the company’s expansion.

Data revenue grew 35.2 per cent in constant currency, overtaking voice revenue as Airtel Africa’s largest business segment.

The operator also recorded significant increases in smartphone adoption and customer usage.

Smartphone penetration rose to 49.5 per cent, while monthly data consumption increased substantially, with average usage reaching 8.9GB per customer.

The company expanded its subscriber base by 10.5 per cent to 183.5 million, while data customers increased 14.8 per cent to 84.2 million.

Chief Executive Officer, Sunil Taldar, attributed the strong performance to favourable industry fundamentals and the company’s sustained investment in digital infrastructure, noting that smartphone users increased by 22 per cent to 91 million, helping drive nearly 50 per cent growth in data traffic.

Telecom Sector Reclaims Investor Attention

The strong appreciation in the market value of MTN Nigeria and Airtel Africa suggests investors are increasingly positioning for sustained earnings growth as telecom operators begin to benefit from improved pricing, expanding digital services and rising data consumption.

With both companies reporting record financial performances and the NCC’s tariff adjustment expected to strengthen margins over subsequent quarters, analysts believe the telecom sector could remain one of the strongest performers on the NGX, even as broader market sentiment remains weighed down by profit-taking across other sectors.