This is Follow the Money, our weekly series that unpacks the earnings, business, and scaling strategies of African fintechs, telcos, and financial institutions. A new edition drops every Monday.
In the first quarter of 2025, MTN Nigeria made more money than any telecommunication company has ever made in a single quarter on the Nigerian Exchange Limited (NGX).
The record performance was not by accident but as a result of rising data demand, strategic fintech expansion, tariff hikes, and sustained investment in infrastructure, according to MTN’s latest earnings report.
As the broader telecom industry grapples with slowing momentum—GDP growth fell to 6.25% in 2024, the lowest in at least six years—such gains could offer a much-needed boost to the sector’s growth in Q1.
MTN’s total revenue—which includes income from services as well as non-service items like SIM cards and device sales—jumped by 40.5% year-on-year, reaching ₦1.06 trillion ($658.4 million) in Q1 2025, up from ₦752.9 billion ($467.7 million) in the same period last year.
Compared to Q4 2024, MTN’s total revenue grew by 6.8% from ₦990.6 billion ($615.3 million).
In February 2025, the Nigerian Communications Commission (NCC) approved a proposal to raise tariffs on voice and data services after a decade, a move it justified as necessary to offset foreign exchange losses and inflationary pressure. MTN attributed the increase to its ability to sustain investments, with ₦202.4 billion ($125.7 million) spent on capital expenditure in Q1, up 159% year-on-year.
“The tariff empowered us to accelerate network investments, boost capacity, and improve user experience,” Karl Toriola, MTN Nigeria CEO, said in its earnings report.
Data remains MTN’s most bankable product
MTN’s total revenue from data services rose by 51.5% year-on-year to ₦529.4 billion ($328.8 million), driven by a 46.4% surge in data traffic and the addition of 2.6 million new active data users in Q1. MTN now serves 50.3 million data subscribers, out of a total of 84.1 million. The company’s data revenue is higher than Airtel Africa’s revenue of $139 million for the same period.
Data usage per subscriber jumped by 29.5% to 12.8 gigabytes (GB), even with higher tariffs. NCC data revealed that national data spending surged to ₦585.08 billion ($363.4 million) in March 2025, nearly double the ₦287.77 billion ($178.2 million) recorded in January.
“Approximately 4.0 million smartphones were added to the network during the quarter, raising smartphone penetration to 60.7%,” Toriola added, attributing the growth to rising demand for high-speed mobile internet.
According to the GSMA, a non-profit trade association that represents the interests of mobile network operators worldwide, 58 million Nigerians are active internet users, with 85% using mobile internet for video calls, 75% for free online video streaming, and 54% for free music streaming.
MTN also continues to build enterprise services for corporate clients, offering broadband (FibreX), mobile engagement suites, bulk SMS, cloud services, and IoT connectivity, ensuring that wholesale contracts remain a stable revenue stream.
MTN’s primary revenue source is not retail consumers but rather wholesale agreements with large companies, says a Lagos-based analyst at a major investment firm who asked not to be named to speak freely.
“These big companies generate significant income for MTN through their high data consumption. Therefore, even if retail consumer spending decreases, MTN’s total revenue remains stable due to its reliance on these major corporate clients,’ he said.
Fintech: Fewer users, more value
MTN’s fintech play, often overshadowed by its core telco business, is beginning to pull more weight. Revenue from its financial services arm rose by 57.9% to ₦36.1 billion ($22.4 million) in Q1, largely due to growth in airtime lending (Xtratime) and increased float income.
However, the number of active wallets declined by 25.7% to 2.1 million. MTN explained that this drop was strategic; it focused on acquiring high-value users who contribute more significantly to float balances and transaction volumes.
“Since Q3 2024, we revamped our customer acquisition strategy, optimising incentives and engagement, resulting in stronger qualitative performance and deeper service penetration,” the company noted.
Rising operating expenses
Operational discipline helped MTN sustain profitability despite Nigeria’s tough macroeconomic environment. After taking a major forex hit in 2024, MTN returned to profit in Q1 2025 for the third straight quarter.
Operating expenses grew modestly by 4.2% to ₦408.7 billion ($253.8 million), much lower than the 25% increase recorded in Q1 last year. Key drivers included renegotiated tower leases—especially with IHS Towers—and ongoing cost-efficiency initiatives.
“Cost efficiency supported the containment of overall operating cost growth,” MTN stated in its earnings report.
Gains for MTN but woes for consumers
The 50% tariff hike means increased monthly spending for cash-strapped consumers. In an economy grappling with double-digit inflation, higher connectivity costs are biting into household budgets.
According to the National Bureau of Statistics, headline inflation in Nigeria rose for the first time this year to 24.2% in March.
Mobile and internet access are now essential services, making their cost a significant aspect of the cost of living. Although Nigeria meets the United Nations’ affordability standard (1GB of data costing no more than 2% of average monthly income), the total spending on internet services is still a burden for many Nigerians. Research by Utility Bidder, a United Kingdom-based business energy consultancy, shows that Nigerian households spend over 67.7% of their monthly income on utilities, comprising water, gas, electricity, broadband, and mobile data.
“Data costs have significantly increased, nearly doubling my expenses. This data also depletes quickly,” Peace Michael, a Lagos-based freelance journalist, told over a phone call. Before the tariff increase, she would buy 75GB for one month at ₦18,000 ($11.2) from a 15GB plan, which was ₦6,000 – ₦7,000 ($3.74 – $4.37)
To manage this, Michael had to remove some social media apps like Facebook and TikTok from my phone. “It’s frustrating to deal with poor network service alongside rising tariffs,” she added.
Another MTN user, Femi, who asked only for his first name to be used, said he typically purchases around 75GB of data, twice a month, due to heavy usage. However, sometimes he buys it only once because MTN often includes a 30GB bonus.
“I avoid overspending on data due to the lack of rollover and unreliable network, but MTN remains my preferred provider as Glo and Airtel are not better options,” he added.
One trillion revenue may be the new normal
A market capitalisation of ₦5.98 trillion ($3.7 billion) as at May 9, 2025, shows that MTN Nigeria is chasing growth. Its April 15 trading volume of over 11 million units on the NGX—the highest in its history—signals rising investor confidence.
“While the full tariff impact on usage and revenue is expected in Q2, early indicators suggest continued resilience in customer demand, aided by our targeted Customer Value Management (CVM) initiatives,” Toriola said.
Still, MTN can’t rely on tariff hikes forever. Sustainable growth will depend on innovation, service quality, and expanding access, particularly to underserved markets.
In the meantime, MTN isn’t just following the money—it’s laying down the infrastructure to keep it flowing. For now, Nigeria’s digital economy has a clear frontrunner.
