GCR Affirms MTN Nigeria AAA Ratings, Outlook Stable
GCR Ratings (GCR) has affirmed the national scale long-term and short-term issuer ratings of AAA(NG) and A1+(NG), respectively, accorded to MTN Nigeria Communications Plc.
The African market-focused rating agency also affirmed the national scale long-term issue rating of AAA(NG) accorded to each of MTN Nigeria Communications Plc’s existing senior unsecured bond issues.
The outlook on the ratings is stable, GCR added.
Ratings analysts said the affirmation of MTN Nigeria Communications Plc’s ratings reflects its strong earnings recovery and a turnaround in cash flow generation, which have underpinned a notable improvement in leverage metrics and liquidity.
Also supportive of the ratings is the company’s strong business profile, given its extensive network infrastructure and large customer base. However, high exposure to currency volatility from its USD-denominated obligations remains a downside risk.
MTN Nigeria is the largest telecommunications provider in Nigeria, supported by its extensive network infrastructure, which enables a broad market footprint and a large subscriber base.
The company recorded a further strong operating performance in 2025, underpinned by demand resilience, consistent network investments and improved efficiency, which has strengthened its market and financial positions.
As published by the industry’s regulator, the company’s active subscribers increased to 95.8 million as of March 2026, up from 90.5 million in 2024, accounting for 51.6% of the industry’s market share, while active data subscribers increased to 53.2 million in 2025 from 47.7 million.
Ratings analysts noted that MTN continues to upscale its fintech business to deepen market penetration and enhance financial inclusion.
While competition within the sector remains intense as other local players build capacity and new entrants emerge across various segments, we expect its entrenched market position to continue to support its competitive strength.
The earnings profile remains a key rating factor, GCR said, affirmed by the notable earnings recovery. MTN Nigeria recorded robust revenue of NGN5.2 trillion in 2025, up from NGN3.4 trillion in 2024, largely driven by a 50% tariff increase, strong commercial execution, and enhanced operational performance across its product offerings.
The EBITDA margin recovered to 52.8% in 2025, up from 39.1% in 2024, driven by improved operating efficiency as the impact of inflation and foreign-currency exposures on tower lease contracts and other USD-denominated expenses abated.
“We expect revenue to grow by 15%-20% range in 2026 and 2027 as the impact of the tariff increase normalises, while the margin should remain strong above 50% on the back of sustained cost control measures.
“However, exposure to foreign exchange (FX) volatility remains a critical hurdle as its FX-linked costs still account for 35%-37% of operating expenses.
“Our assessment of the company’s leverage and capital structure is slightly improved because of enhanced debt profile”, GCR said in the rating note.
Following the repayment of its foreign-currency loans and matured loan facilities, total debt (excluding lease liabilities) decreased to NGN377.7 billion in March 2026, down from NGN527.7 billion in March 2025 and N972.9 billion in 2024.
Despite the extended tower lease tenor, lease liabilities remained relatively stable at NGN2.3 trillion from 2024 through March 2026, aided by a more stable FX market and savings from the renegotiated tower contract terms that reduced the FX component.
Accordingly, gross debt (including lease liabilities) reduced to NGN2.8 trillion in March 2026 (2025: NGN2.9 trillion) from NGN3.3 trillion in 2024.
GCR said the lower debt, supported by robust earnings, translated into an improvement in overall leverage metrics, with net debt-to-EBITDA falling below 1x in 2025 and Q1 2026 (2024: 2.2x).
MTN Nigeria’s operating cash flow coverage of debt rose to 114% in March 2026 from 80.2% in 2025, while net interest coverage rose to 5.8x in 2025 and 6.9x in March 2026.
GCR said the telecom company’s management plans to continue deleveraging and, if necessary, focus on local debt issuance to consistently contain its FX exposure.
“We expect the strong credit fundamentals to be sustained over the outlook period, supported by the anticipated robust earnings and conservative debt level”.
Additionally, GCR analysts noted an enhanced capital structure, evidenced by positive shareholder equity in 2025 and Q1 2026, compared with negative positions in the prior two years.
The liquidity assessment is slightly positive to the ratings, according to GCR, predicated on stronger cash flow from operations and large cash holdings sufficient to cover the projected debt repayment, dividends and capital spending.
The improved liquidity quality is also due to a longer debt maturity profile than in previous years. Although capital spending is expected to remain high, this should be adequately covered by the estimated robust operating cash flow, GCR said.
MTN Nigeria’s dividend payments have resumed following its return to profitability, albeit well covered by the robust earnings. As such, the liquidity sources-versus-uses coverage is estimated at 1.6x over the nine-month period to December 2026 and 1.3x over the 21-month period to December 2027.
Given that MTN Nigeria is operationally integral to MTN Group, we have factored in group support to the ratings.
GCR noted the increased revenue contribution of MTN Nigeria to 28.7% of the parent’s gross revenue in 2025 from 23.1% in 2024, albeit still below the GCR threshold of about 35.0% for materiality.
However, analysts said they consider MTN Nigeria strategically critical to MTN Group, given the group’s extensive investment in Nigeria. A
MTN Nigeria raised a cumulative NGN315 billion in bonds over the past three years under its two separate NGN200 billion programmes in series 1, series 2, series 1 tranche A and tranche B bonds issuances.
These bonds constitute direct, unconditional, senior, unsubordinated and unsecured obligations of MTN Nigeria and at all times rank pari passu and without any preference among themselves.
GCR said it reviewed the Trustee’s bonds performance report and the transaction account bank statements both dated 4 May 2026 and note that MTN Nigeria has complied with the transaction terms and conditions in respect of the timing of payments as stipulated in the trust deeds.
Being senior unsecured debt, the bonds bear the same probability of default as the issuer and would reflect similar recovery prospects to senior unsecured creditors in the event of a default.
As such, the long-term rating for the respective bonds is equalised with MTN Nigeria’s long-term senior unsecured rating.
“The stable outlook reflects our expectations that MTN Nigeria will sustain robust earnings and cash flows that underpin the strong leverage metrics and sound liquidity position.
“This is further fostered by the demonstrated group support, in terms of financial management and technology transfer”, GCR Ratings stated. South African Rand Weakens as US-Iran Peace Deal ‘Hangs’
