03 May 2024
MTN has revealed its strategy to restore profitability in its Nigerian unit which includes raising tariff prices, after being hit by a sharp devaluation in the local currency.
“Continued elevated inflation and unpredictable foreign exchange rates remain significant challenges for the businesses. However, we remain focused on sustaining our commercial momentum, accelerating our service revenue growth, unlocking operational efficiencies and strengthening our balance sheet to improve the profitability of our businesses,” said MTN in a statement. “We do, however also require regulated tariff increases to restore the profitability of the company.”
The company will cut back on capex in 2024 to upper single digits with an expense efficiency programme and value-based capex allocation. Its strategy will involve optimising latent capacity and implement fresh radio planning to minimise disruption to its network and maintain services in Nigeria.
A key contributor to the plunge in MTN Nigeria’s financial health has been its outstanding letters of credit obligations which are ‘largely foreign currency dominated.’ The company is looking to reduce its exposure to US dollar volatility.
