MTN Nigeria Drives South African Telecom Group Q1 Earnings Growth
MTN Group (MTN) released an update for the first quarter ended 31 March 2025. Service revenue increased 20.5% to R56.7 billion, with key support from the Nigeria subsidiary.
The topline was buoyed by 5.4% increase in customer base, which expanded to 312.7 million, First National Bank (FNB) said in a review note shared with clients and other investors.
In constant currencies, service revenue was up 21.1%, led by sustained commercial execution at MTN Nigeria (+41.7%), MTN Ghana (+35.7%), MTN Cameroon (+14.4%) and MTN Côte d’Ivoire (+18.3%).
Despite the continued competitive pressure on the prepaid market at MTN South Africa (MTN SA), service revenue growth edged up by 0.7%, analysts at First National Bank said in a review note.
The group voice revenue remained resilient, expanding by 4.7%, supported by subscriber growth and customer value management initiatives in key markets.
Data remained the biggest contributor to overall group service revenue growth, rising 35.4%. Fintech revenue increased 20%, underpinned by strong service growth in Ghana, Nigeria, Uganda, and Cameroon.
Analysts said active mobile money (MoMo) grew by 19.2%, reflecting a steady expansion of basic services revenue (+10.8%) and a robust increase in advanced services revenue of 36.7%. Transaction volumes rose 15.8%, and transaction value grew 32.8% to $163 billion.
EBITDA (before once-off items) grew 28.3% to R27.6 billion, with the margin improving by 3.4-percentage points (ppts) to 47%. The net debt/EBITDA leverage ratio came in at 0.2 times (FY25: 0.3 times) and remains well within the target range of no more than 1.0 times.
The telecoms giant delivered a strong start to the new financial period, with service revenue outpacing the medium-term target for “at least high-teens” growth, particularly driven by solid growth in Data and Fintech.
Regionally, this was driven by a strong performance from Nigeria, Ghana, Cameroon and MTN Côte d’Ivoire, as well as encouraging momentum across several other markets.
First National Bank, the country’s oldest bank, said South African MTN Group business continued to face headwinds from heightened competition in the prepaid market; however, the region still achieved marginal revenue growth.
Group EBITDA showed robust double-digit growth, outpacing the top-line performance on the back of continued benefits from expense efficiencies, resulting in a widening of the EBITDA margin, which was another key highlight.
Management reaffirmed its medium-term guidance as the group continues to make progress with its Ambition 2030 strategy. Analysts said regionally, the group will continue to focus on commercial interventions to accelerate MTN SA’s performance recovery.
“MTN Nigeria will prioritise targeted network investment to support growth and further enhance quality, while maintaining its sharp focus on cost discipline, capital efficiency and balance sheet strength.
“MTN Ghana remains focused on the disciplined execution of its commercial initiatives, operational efficiency and value-based capital allocation. In the rest of the group’s markets, management will continue to focus on sustaining the turnarounds and positive momentum in various opcos.
“MTN is trading on a forward PE of 11 times, which appears to be at a slight premium relative to its long-term and peer average. While we recognise continued operational improvements within the portfolio, we continue to prefer Vodacom from a long-term investment perspective”, First National Bank said in a review note.
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