Forex: MTNN, Airtel Post N511.17bn Loss

The depreciation of the naira as against the dollar, has resulted in a combined loss of N511.27 billion for MTN Nigeria and Airtel Africa.

This is even as stakeholders have intensified their cry for an increase in call and data tariffs, to ensure sustainability of the telecoms sector.

Analysing the first quarter financial statements of both companies, Airtel Africa’s Q1 loss after tax was N118.57 billion ($91 million), compared to its Q1, 2023 profit after tax of N104.65 billion ($227 million), 

Similarly, MTN Nigeria’s N108.43 billion profit after taxes for the same time last year is not the same as its N392.69 billion loss after taxes. Foreign exchange headwinds were the reason given by both telcos for these losses.

In his reaction, MTN Nigeria’s chief executive officer, Karl Toriola, said the cost of doing business, and the devaluation of naira have caused significant difficulties for businesses operating in Nigeria, including MTN Nigeria.

Toriola noted that the company is engaged with authorities, through its industry body, on a tariff increase because of the effects of challenging operating conditions.

“Importantly, appropriate tariff increases will be necessary to support continued investment and the long-term sustainability of the industry. This will support our commercial interventions in our work to accelerate top line growth,” he said.

Earlier, the Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria (ATCON) argued that rising inflation and currency devaluation necessitated higher tariffs.

The president, ALTON, Engr. Gbenga Adebayo said, for a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence.

“Both MTN and Airtel have declared significant foreign exchange losses in Nigeria, and the stress is not linked to them alone. The entire ecosystem is battling with a range of challenges that must be addressed. If we fail to do so, the downstream impact on innovation will be severe,” he posited.

He highlighted that while the cost of living has worsened, the price of connectivity must increase in a measured way for people to enjoy its benefits. “We need to find a long-term, sustainable, and manageable solution to this problem,” he added.