Data boom: Airtel and MTN set for profit surge in 2025
With data revenue now representing nearly half of their total income, MTN Nigeria and Airtel Africa are making significant investments in data services rather than traditional voice calls.
What was once considered a value-added service has now become the primary driver of growth and profit margins.
However, as prices increase, consumer behaviors change, and digital infrastructure improves, investors are left with a crucial question:
Will this shift towards data finally help MTN Nigeria recover from its accumulated losses and enable Airtel to maintain its dollar dividend payouts?
The answers depend on how each telecommunications company is utilizing data to reshape its financial future. Let’s begin with MTN Nigeria.
MTN Nigeria:
After experiencing a staggering N440 billion loss after tax in 2024, primarily due to foreign exchange fluctuations that impacted profits, the company made a remarkable recovery in Q1 2025, reporting a profit after tax of N133.6 billion.
The stabilization of foreign exchange markets and growth in fintech revenue played a role, but a significant factor was the rapid increase in data revenue.
In the fiscal year 2024, MTN reported N1.59 trillion in data revenue, a 49% increase from the previous year, which accounted for 47% of its total revenue—a significant shift from the previous voice-dominated model.
This growth trend continued into Q1 2025, with data revenue reaching N528.98 billion, making up 50% of total revenue for that quarter.
Subscriber metrics support this trend:
- Active data users increased by 7% to 47.7 million.
- Data traffic surged by 42.9% year-on-year.
- Average data usage per subscriber rose by 33.6% to 11.2GB, reaching 13.2GB in Q4.
The company stated:
“The growth in data revenue was driven by an increase in active data users, higher usage, and improvements in our network’s quality and coverage. We continued to promote smartphone adoption and 4G usage while implementing pricing strategies to support revenue growth.”
These pricing strategies, along with enhanced user experiences, were made possible by MTN’s ongoing investment in digital infrastructure.
With the expansion of 4G and the early rollout of 5G in select areas, data speeds have improved, allowing the company to maximize revenue per megabyte.
How does this impact the bottom line?
MTN’s gross margin on data services is significantly higher than on voice services, mainly because the incremental costs per gigabyte decrease as usage increases. In simple terms, once the infrastructure is established, more usage leads to greater profitability.
If the trend from Q1 2025 continues, MTN could conservatively generate over N2 trillion in data revenue for the fiscal year 2025.
With an EBITDA margin forecast of “at least mid-40%,” this could translate to N900 billion to N1 trillion in EBITDA from total revenue this year.
In comparison, MTN reported N769.7 billion in EBITDA for FY 2024, highlighting the strength of its data-driven growth.
If depreciation, amortization, and finance costs remain stable, and the naira stays relatively steady, MTN could achieve a full-year net profit exceeding N400 billion, effectively reversing the entire loss from 2024.
This would not only eliminate retained losses but also position the company to resume dividend payments by 2026 at the latest, or possibly sooner, depending on board decisions.
As of Q1 2025, MTN’s trailing 12-month earnings per share (EPS) stands at N5.96, resulting in a price-to-earnings ratio of 53.56x.
The stock closed at N319.20 on June 5, 2025, reflecting a strong 59.6% gain year-to-date, largely driven by improving investor sentiment and the potential for profitability recovery.
While challenges such as foreign exchange volatility, infrastructure costs, and capital expenditure intensity remain, the return to profitability suggests that the worst may be behind the company.
Smart investors should monitor data on average revenue per user (ARPU), user growth, and operating margins in the upcoming quarters. These factors could shift MTN from survival mode back to a dividend-paying leader.
Airtel Africa
Similar to MTN, Airtel Nigeria is also focusing on data to propel its business forward. Although its headline figures may appear weak due to exchange rate fluctuations, the underlying performance tells a different story.
For the year ending March 2025, Airtel Nigeria reported a 30% decline in revenue to $1.045 billion, with data revenue falling 26% to $483 million.
However, this decline is primarily due to the weaker naira. When adjusted for currency effects, revenue actually increased by 36%, and data revenue grew by an impressive 45%.
The company explained, “Our data business remains a key growth driver, supported by more smartphones, expanded 4G coverage, and improved network capacity.”
Data now constitutes 44% of Airtel Nigeria’s total revenue, slightly down from 46% the previous year, and closely trailing MTN Nigeria’s 47% in 2024 and 50% in Q1 2025.
Airtel also experienced growth in its customer base, adding approximately 1.7 million new data users, bringing the total to 29.1 million, while average revenue per user increased to $1.9 in the last quarter, indicating that more customers are using more data and paying slightly more for it.
Airtel Africa reported a profit after tax of $328 million for FY 2025, a significant turnaround from the $89 million loss recorded the previous year.
Can data sustain dividends?
In Nigeria alone, data generated $483 million in FY 2025, impacted by exchange losses. However, in constant currency, this represents a 45% increase, indicating strong underlying performance.
If this growth trend continues and ARPU rises moderately to $2 by Q4, Airtel Nigeria could generate over $550 million from data in the current financial year, even before considering foreign exchange gains or tariff increases.
Additionally, with data traffic on the rise, data could account for 60–70% of its operating profit by next year. This position would allow Airtel to comfortably cover its dividend, even if voice or mobile money revenues slow down.
Indeed, Airtel Africa has already demonstrated this confidence by declaring a $0.04 per share final dividend for FY 2025.
On the Nigerian Exchange, Airtel Africa’s share price was N2,372.50 as of June 5, 2025, reflecting a 10% gain year-to-date. It trades at a moderate price-to-earnings ratio of 26x, compared to MTN Nigeria’s 53.56x.
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