MTN's profitability to recover, fortified by strategic investments in Nigeria
MTN Nigeria's Strategic Expansion Transforms Telecom Landscape
MTN Group, a leading telecommunications company, is making significant strides in Nigeria with a strategic expansion plan. This plan includes a substantial investment in infrastructure, innovative wholesale models, and a focus on enhancing service quality and market access.
The company has announced a $240 million investment in a new data center, one of the largest deployments of its kind on the continent. This data center, named after the late former CEO Sifiso Dabengwa, currently delivers 4.5 MW of capacity and is expected to scale up to 9 MW in subsequent phases. The data center is designed to power West Africa's growing demand for cloud computing, AI workloads, and enterprise services.
In addition to the data center, MTN Nigeria is investing heavily in infrastructure. The company's capital expenditure surged 288.4% year-on-year in H1 2025 to $377.1 million. This significant investment is funding 4G expansion, fiber rollout, and passive infrastructure, positioning MTN as a key digital infrastructure provider in the region.
One of the key aspects of MTN's strategy is the adoption of innovative wholesale models. The company has entered into a three-year national roaming agreement with 9mobile (rebranded as T2). This agreement allows 9mobile subscribers to roam on MTN's network infrastructure, starting in Lagos and expanding nationwide by the end of the month. This model lowers barriers for new entrants and promotes efficient use of existing infrastructure.
By leasing infrastructure to competitors and MVNOs, MTN is creating a new wholesale revenue stream while fostering broader market inclusion in line with the Nigerian Communications Commission's vision. This wholesale approach allows MTN to earn from competition without acquiring those subscribers directly, potentially shifting competitive dynamics in Nigeria’s telecom market.
MTN Nigeria's strategic play in Nigeria could serve as a blueprint for unlocking growth in other underserved markets across the continent. The company comfortably owns 52% of the market in Nigeria, and if current momentum holds, it could pave the way for similar success in other regions.
The group will release its full H1 2025 financials on August 18, and if the projected share range of R6.14 to R6.66 holds true, it would represent a significant increase from a loss of R2.56 in the same period last year. Adjusted for non-operational items, the share price is forecast to rise by 68% to 82% year-on-year.
Both MTN Nigeria and MTN Ghana delivered strong interim results in July, indicating a positive outlook for the group. As of early 2025, 9mobile's active base had dwindled to 3.2 million users. However, the national roaming agreement, potentially restoring network access for up to 22 million former 9mobile users, could change this trend.
In summary, MTN Nigeria's strategic expansion in Nigeria is transforming the company from a retail telecom player to a key infrastructure enabler. This dual role enhances service quality, expands market access, and alters competition in Nigeria’s telecom sector. The partnership between MTN Group and 9mobile, if successful, could set a precedent for similar collaborations in the future.
- In its strategic expansion, MTN Group is not only focusing on enhancing telecom services but is also entering the technology and finance sectors, with a $240 million investment in a data center that aims to power West Africa's growing demand for cloud computing, AI workloads, and enterprise services.
- MTN Nigeria's strategic move to lease infrastructure to competitors and MVNOs is not only fostering broader market inclusion but also tapping into the finance industry by creating a new wholesale revenue stream.
