Karl Toriola, MTN Nigeria CEO
Technology firm, MTN has reported a 41.8 per cent service revenue surge as subscriber base hits 89.5 million, but regulatory headwinds emerge in the digital lending segment.
MTN Nigeria Communications Plc delivered a blockbuster first quarter in 2026, with profit after tax more than doubling to N355.5 billion from N133.7 billion a year earlier, driven by explosive growth in data consumption and digital financial services.
The firm’s Q1, 2026 financial results released Thursday, disclosed that service revenue jumped 41.8 per cent year-on-year to N1.49 trillion, as total revenue climbed to N1.50 trillion for the three months ended March 31, 2026.
The performance marks a dramatic reversal from the company’s loss-making position in 2024 and underscores the telecom operator’s commanding market position despite persistent macroeconomic pressures.
MTN Nigeria’s Chief Executive Officer, Karl Toriola, said: “We sustained strong commercial momentum, maintained disciplined cost management and accelerated investment in our network, translating underlying demand into robust financial performance.”
Analysis of the report showed that data revenue surged 56.2 per cent to N827.2 billion, cementing its position as the company’s primary growth driver.
Active data users rose 9.5 per cent to 55 million, while data traffic expanded by 22.9 per cent, with average usage per subscriber climbing to 14.3GB. Smartphone penetration increased to 66.2 per cent, enabling higher consumption patterns.
Voice revenue, traditionally MTN’s cash cow, grew a more modest 22.5 per cent to N499.1 billion, supported by subscriber additions and pricing strategies.
Overall, MTN added 2.3 million revenue-generating subscribers during the quarter, bringing its total base to 89.5 million.
The fastest-growing segment was fintech, where revenue jumped 77.9 per cent to N64.2 billion, reflecting increased adoption of digital financial services and higher interest income on customer balances.
However, the division faced a significant regulatory disruption during the quarter. MTN disclosed that it “temporarily suspended its airtime and data credit advance service (‘Xtratime’)” in response to new requirements under the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025. The framework introduced a revised compliance and licensing regime for providers of digital credit.
The company said it is onboarding approved providers and expects to resume the service once the process is completed. “Following the initial impact of the suspension, recharge patterns have continued to normalise as affected customers settle outstanding balances and maintain service usage,” MTN stated, adding that the recovery has supported a rebound in revenue through increased self-funded recharges.
In a related development, MTN Nigeria announced plans to restructure its fintech operations by bringing in parent company MTN Group as a major investor. The Group, through MTN Group Fintech Holdings B.V., will acquire a 60 per cent stake in MoMo Payment Service Bank and Y’ello Digital Financial Services, with MTN Nigeria retaining 40 per cent.
The transaction, valued at N95.5 billion on an intra-group debt-free basis, implies a capital injection of N152.1 billion into the fintech companies. MTN Nigeria said the move will reduce its future funding obligations, strengthen balance sheet flexibility, and allow increased focus on core connectivity while retaining exposure to fintech growth.
Operating efficiency improved markedly during the quarter. Operating expenses rose just 16.1 per cent, well below revenue growth, enabling operating leverage. Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased 68.1 per cent to N828.3 billion, while EBITDA margin expanded to 55.3 per cent from 46.6 per cent in the prior year.
Free cash flow increased 55.6 per cent to N326.5 billion, even as cash and cash equivalents declined to N506.9 billion from N632.7 billion at the start of the quarter, reflecting heightened investment activity. Capital expenditure excluding leases nearly doubled, rising 92.8 per cent to N390.3 billion as the company accelerated network investment to support rising data demand.
Toriola noted that inflationary pressures linked to higher energy prices were partly offset by a stronger naira, which closed at N1,387/$ at the end of March compared with N1,436/$ at the end of the December quarter .
Looking ahead, MTN expects service revenue growth to normalise as prior tariff adjustments become fully annualised from the second quarter. The proposed fintech restructuring is subject to shareholder approval at the yearly general meeting scheduled for today, April 30.
The Guardian
