After over a decade of tariffs remaining static, the NCC finally approves a tariff hike for the telcos

Joy is coming is a single by Afrobeats star Fido. If you follow Afrobeats, you might know him from the hit single Awolowo.

Last year, i had written MTN Nigeria was waiting on a prayer. Choked by a spike in operating costs and FX losses, the company’s tank essentially went into the red. The only path forward was an increase in tariffs.

The Nigerian Communications Commission (NCC) announced the approval of a 50% hike in tariffs.

The telcos were pushing for a 100% increase. So they got half of what they wished for?

When Lambo? As the crypto folks say. It may take a few quarters for that increase to reflect meaningfully in the balance sheet.

9M 2024 numbers show the firm had an accumulated loss of N723 billion

Q3 2024 operating profit was about N170 billion. After deducting tax, finance costs and fx losses, profit after tax came to about N4 billion.

It could take a few quarters (my guesstimate is 4) A quarter by the way is 3 months.

It is hard to model at what point the balance sheet goes back in the black. We could see some more colour from Airtel Africa when it drops its 9M 2024/2025 numbers next week.

We also dont know how the increases will take place. Across all plans or a select few?

Is the stock a buy/sell/hold ?

Ask your financial adviser.

The bigger question for me is beyond the FX losses, the firms were in decent financial shape. Not perfect but robust compared to many sectors.

What do you do when joy is coming? Wait for it and then rejoice? Or rejoice ahead?View draft history