By Ayomide Otitoju
MTN Nigeria Plc has seen a remarkable rise in its market value as expectations of a telecom tariff hike fuel investor interest. On Thursday, the telecom giant’s share price surged by 10%, closing at ₦242 on the equities market, pushing its market capitalization to ₦5.08 trillion.
The upward momentum, which began midweek, comes as the Nigerian Communications Commission (NCC) and the federal government deliberate on approving a rate hike for telecom operators. The proposed increase is seen as a response to soaring inflation and the persistent depreciation of the naira, which have negatively impacted the financial stability of the sector.
Telecom operators, including MTN Nigeria, have faced mounting payroll expenses and operational costs, partly driven by rising fuel prices and unfavorable macroeconomic conditions. Analysts noted that MTN’s financial performance was also hit by significant foreign exchange losses, as the devaluation of the naira led to a steep decline in shareholder funds due to US dollar-denominated liabilities.
Earlier in 2024, MTN’s share price plunged from its 52-week high to trade near ₦170, raising concerns among investors. However, a recent decision to localize its debt portfolio has revived optimism, with analysts projecting strong upside potential for the stock.
Meanwhile, telecom operators have submitted a proposal to the NCC, seeking a 100% hike in telecom tariffs. The proposal is yet to receive final approval, but operators argue the increase is crucial to offset rising operational costs and ensure sustainability in the face of economic challenges.
As a key player in Nigeria’s economy, MTN Nigeria continues to draw attention from investors, positioning itself to navigate the challenging macroeconomic landscape while exploring opportunities for growth.
