After 50% Tariff Hike: Airtel Reinvests, MTN Prioritises Cash

Nigeria’s 50 per cent telecom tariff increase has delivered a sharp improvement in revenue and profitability for the telecommunications operators, but their spending patterns show a clear difference in how the additional earnings are being deployed.

A review of available financial results shows Airtel Nigeria has accelerated network investment, while MTN Nigeria has taken a more cautious approach, prioritising cash generation, debt reduction and shareholder returns over a significant increase in capital expenditure.

The divergence raises a key question about the justification for the tariff increase, and that is querying how much of the additional revenue is actually being put back into the networks that subscribers were told would improve.

Pinnacle Daily reports that the Nigerian Communications Commission (NCC) approved the 50 per cent tariff adjustment in January 2025, the first major increase in 12 years, stating that operators faced rising operational costs and needed higher tariffs to sustain investment in infrastructure and service delivery.

According to the NCC, the adjustment was expected to support operators’ ability to invest in infrastructure and innovation, leading to “better network quality, enhanced customer service, and greater coverage.”

At the time, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) Chairman, Gbenga Adebayo, described the sector as “under siege”, citing inflation, exchange-rate volatility and rising energy costs.

But the financial results now show that higher tariffs have substantially strengthened operators’ financial performance, even as their approaches to reinvestment have begun to diverge.

Revenue and profits surge

MTN Nigeria’s audited 2025 results show revenue increased by 54.92 per cent to ₦5.20 trillion from ₦3.36 trillion in 2024. Data revenue rose 74.58 per cent to ₦2.78 trillion, while voice revenue increased 49.54 per cent to ₦1.65 trillion.

The company’s operating profit jumped 167.20 per cent to ₦2.08 trillion from ₦778.2 billion, while profit after tax recovered to ₦1.11 trillion from a loss of ₦400.4 billion in 2024.

Airtel Nigeria also recorded strong growth in local-currency terms. Its revenue increased 36.4 per cent in constant currency in 2025, with data revenue rising 44.5 per cent and voice revenue increasing 24.3 per cent.

Its underlying EBITDA grew 26.7 per cent in constant currency, although reported US-dollar revenue and EBITDA declined because of naira depreciation.

The improvement continued into 2026. MTN Nigeria’s H1 revenue rose 25.9 per cent to ₦2.99 trillion, while EBITDA increased 39.2 per cent to ₦1.67 trillion and profit after tax climbed 70.6 per cent to ₦707.5 billion.

Airtel Nigeria’s Q1 revenue increased 50.4 per cent to $501 million, with EBITDA rising 58.4 per cent to $293 million and the EBITDA margin expanding to 58.6 per cent.

The stronger financial performance means the key issue is no longer whether the tariff increase has improved operators’ finances. It clearly has.

The more important question is how much of that improvement is being converted into network investment.

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Airtel accelerates, MTN holds back

The contrast is clearest in the 2026 capital expenditure figures.

Airtel Nigeria’s mobile capex jumped 229.9 per cent to $128 million in Q1 2026, as the company brought investment forward to expand capacity and prepare for future demand. At group level, Airtel Africa’s capex rose 221.5 per cent to $389 million.

Airtel also paid $37 million for the renewal of its 900MHz spectrum in Nigeria and expanded its network by adding 920 sites during the quarter, and its fibre network reached 82,100 kilometres.

Based on the supplied reinvestment calculation, Airtel Nigeria put about $52.98 back into capital expenditure for every $100 increase in revenue in the Q1 comparison.

In estimated naira terms, that translates to about ₦72.05 of every additional ₦100 of revenue.

MTN Nigeria presents a very different picture, as its H1 2026 revenue increased 25.9 per cent, but capex excluding leases rose only 1.2 per cent to ₦620.5 billion.

On that basis, the company put only about ₦1.20 into additional capex for every ₦100 increase in revenue.

When lease additions are included, total capex fell by 19.3 per cent, producing a negative incremental reinvestment figure of about -₦30.96 for every ₦100 increase in revenue.

This does not mean MTN stopped investing in its network. The company continued to focus on FTTH and 5G fixed wireless access, while securing additional spectrum through a strategic lease from T2 Mobile. It also allocated ₦7.9 billion in 2025 to BTS solar installations and electric vehicle charging infrastructure.

But the numbers show that its investment has not increased in proportion to its revenue growth.

Cash, debt and dividends take priority

The analysis reveals that MTN’s strategy has instead been centred on financial discipline.

Its free cash flow rose 73.9 per cent to ₦712.7 billion in H1 2026. The company fully repaid its outstanding foreign-currency loans, which stood at $105m at the end of 2025, reducing its exposure to further naira depreciation.

MTN also paid a ₦314.6 billion final dividend in May 2026 and declared an interim dividend of ₦26 per share.

The company’s approach reflects a deliberate shift towards balance-sheet strength and shareholder returns rather than a major increase in infrastructure spending.

The difference is also visible in their 2025 performance. Airtel’s full-year capex fell 33.6 per cent to $168 million, while MTN maintained a more disciplined investment strategy. But Airtel’s aggressive Q1 2026 spending suggests a significant change in its investment cycle, with management bringing spending forward to capture future demand.

The real test is service quality

There are signs that some of the additional investment is reaching customers. Airtel reported network availability of 98.8 per cent and said its average monthly data consumption increased 33.4 per cent to 8.4GB.

Its SRv6 automation also reduced recovery time from fibre cuts from about 30 minutes to 30 seconds.

Both operators have also introduced measures to improve network resilience and reduce energy costs.

However, the financial reports do not provide enough information to establish a direct link between tariff increases and overall customer experience.

Neither publishes detailed network-speed figures, outage durations or customer complaint numbers in the results supplied, leaving an important accountability gap.

This organisation recalls that the NCC approved the tariff increase on the condition that operators demonstrate “measurable improvements in service delivery.”

The financial results show that revenues and profits have improved substantially.

The results also show that Airtel has significantly accelerated investment while MTN has prioritised cash preservation, debt reduction and dividends.

The next test, therefore, is whether those different strategies produce measurable improvements in network quality.

For consumers paying more for calls and data, the question is no longer simply whether telecom operators need higher tariffs; it is whether the higher prices are producing enough additional investment to justify the higher cost of staying connected.