Nigerian telecommunication companies have recorded a 15.46 percent increase in average revenue per user (ARPU) in the first quarter (Q1) of 2025, reversing a trend of successive quarterly declines.
ARPU shows the profitability of a product based on the amount of money that is generated from each of its users or subscribers, Investopedia says.
The average combined ARPU of Airtel Nigeria and MTN Nigeria rose to $2.24 in Q1 of 2025, up from $1.94 in Q1 2024.
This increase followed the Nigerian Communications Commission (NCC)’s recent approval of a 50 percent hike in telecom tariffs, marking the first major adjustment in over a decade. The changes raised the floor price of voice calls from N6.40 to N9.60 per minute, SMS from N4 to N6, and 1GB of data from N287.50 to N431.25.
Operators record revenue, profit rebound
MTN Nigeria’s ARPU grew to $2.57 in Q1 of 2025 from $2.18 a year earlier, while Airtel Nigeria’s ARPU climbed to $1.90 from $1.70. Both companies also reported strong revenue growth, with MTN’s revenue rising 40.5 percent year-on-year to N1.06 trillion, while Airtel Nigeria’s revenue increased by 15.4 percent to $307 million.
Beyond ARPU growth, the introduction of new tariffs has returned telcos to profitability after successive quarters of losses. MTN Nigeria posted a profit after tax of N133.7 billion in Q1, a first since 2023. Airtel Africa, with 58.26 million Nigerian subscribers, reported a profit after tax of $328 million for its full year ended March 2025, a significant improvement from the $89 million posted in the corresponding period of 2024.
“An improving operating environment and focused execution contributed to strong momentum in our financial results, with constant currency revenue growth peaking at 23.2 percent in Q4’25. Part of this acceleration in the last quarter has also been driven by the Nigerian tariff adjustments,” said Sunil Taldar, chief executive officer of Airtel Africa.
Read also: Telcos tap satellites to scale rural food production
Nigeria lags peers on ARPU
Despite the recent growth, Nigeria remains one of MTN Group’s lowest ARPU markets. In Q1 of 2023, MTN Nigeria had the highest ARPU across the group at $5.03. But by Q1 of 2025, it ranked 11th among the 16 countries where MTN operates. Airtel Nigeria’s ARPU also remains lower than its operations in East Africa ($2.1) and Francophone Africa ($3.2).
MTN Nigeria also reclaimed its position as MTN Group’s top revenue contributor in Q1, after MTN South Africa overtook Nigeria in 2024. MTN Group’s revenue grew by 10.41 percent in Q1 of 2025, reaching $2.59 billion (47.37 billion rands), up from $2.35 billion (42.90 billion rands) in the same period of 2024.
Investments return after years of stagnation
This improvement in ARPU is encouraging long-delayed investments in telecom infrastructure. Years of underinvestment had limited network expansion and contributed to deteriorating service quality nationwide.
“Financial performance of the mobile industry in Nigeria has slowed down in recent years after a long period of sustained growth,” said GSMA, the global body for telcos, in 2024.
Operators couldn’t match rising expenses, mostly in dollars, leading to a reduction in network investments and deteriorating service quality in 2024.
Read also: Telcos to pour N1.6tn into network as glitches mount
However, this is changing. “Telcos have made equipment orders worth $1 billion, and they are expected to start taking delivery from June,” said Bosun Tijani, minister of communications, innovation and digital economy.
MTN Nigeria, which has 84.1 million subscribers, increased its capital expenditure by 159 percent year-on-year in Q1 to N202.4 billion. Airtel Nigeria, with 58.3 million subscribers, spent $168 million on capital expenditure for the year ended March 2025 and plans to double that investment this year.
“Our decision to double our investment reflects our deep commitment to Nigeria’s future,” said Dinesh Balsingh, CEO of Airtel Nigeria. “We are investing in transformative infrastructure that will deliver unmatched value to our customers and make connectivity an everyday reality for more Nigerians.”
Consumer impact and usage decline
As telcos’ ARPUs recover, the impact on consumers dealing with rising living costs remains a concern. “The hike has imposed untold hardship on many Nigerians already grappling with double-digit inflation,” stated Adeolu Ogunbanjo, president of the National Association of Telecoms Subscribers (NATCOMS).
Bismarck Rewane, CEO of Financial Derivatives Company, warned that while the move may improve telcos’ margins, it could also lead to reduced usage. Already, citizens are scaling back on usage. Internet traffic dropped from a record 1 million terabytes (TB) in January to 893,054.80 TB in February, before climbing back up to 995,876.10 TB in March, according to data from the NCC.
