MTN Nigeria has announced plans to increase call tariffs and is also eyeing the acquisition of 9mobile's spectrum.
The telecommunications giant revealed these initiatives in a statement following its extraordinary general meeting on Friday.
MTN Nigeria emphasized that the tariff hikes are part of a broader strategy to boost revenue growth and operational efficiency, ultimately leading to margin recovery.
The company has been engaging with the Nigerian authorities through industry bodies to discuss the necessity of tariff increases, citing the need to support continued investment and the long-term sustainability of the industry.
Furthermore, MTN Nigeria has been actively working on reducing its exposures to US dollar volatility.
A key area of focus has been the company's outstanding letters of credit (LC) obligations, which have contributed to the volatility in its earnings through foreign exchange losses.
To mitigate this, MTN Nigeria has utilized the improved liquidity in the foreign exchange market to reduce its outstanding LC obligations to $243.4 million as of March 31, 2024, from $416.6 million as of December 31, 2023.
The company also plans to review tower lease contracts with key tower service providers to negotiate changes to existing tower lease contracts.
MTN Nigeria believes that these initiatives will accelerate the recovery of the company's earnings and restore its net asset position more quickly.
In addition to the tariff increase and operational efficiency improvements, MTN Nigeria is also considering the acquisition of 9mobile's spectrum.
This move would potentially enable MTN to further expand its market share and strengthen its position in the Nigerian telecommunications industry.
Overall, MTN Nigeria's latest strategic moves reflect its commitment to addressing the challenges posed by the country's operating conditions and improving its financial position.
The company's proactive approach to tariff increases and potential spectrum acquisition demonstrates its focus on driving revenue growth, enhancing operational efficiency, and delivering value to its shareholders.
