MTN, Airtel cut capital expenditure to N2.24tn

MTN Nigeria and Airtel Africa applied cost-cutting measures in 2024 but still maintained a combined capital expenditure of N2.24 trn to sustain network expansion and digital infrastructure investments.

While both operators adjusted their spending strategies, the operators remained committed to strengthening their networks to meet growing demand across their markets, they said in their financial statements.

Airtel Africa, which operates in 14 countries, including Nigeria, reported a $456m (N706.8bn) Capex for the nine-month period ending December 31, 2024.

This marked a 7.8 per cent decline from the previous year, reflecting a cautious approach amid economic headwinds.

However, the company maintained its full-year Capex guidance between $725m and $750m, signalling continued investment in network infrastructure and distribution, it stated in the report.

The CEO of Airtel Africa, Sunil Taldar, commented on the report, “We remain committed to investing for the future by expanding our distribution and network to ensure that we capture this significant growth opportunity on offer.

“Despite the challenging environment for many of our customers, we continue to see strong demand for our services as we enable connectivity and facilitate access to the digital economy.”

MTN Nigeria, the country’s largest telecom operator, recorded a 168.3 per cent surge in Capex to N1.53trn, driven largely by tower lease renegotiations that increased financial obligations.

Excluding leases, core infrastructure spending, including fibre networks, base stations, and technology upgrades, declined slightly to N443.5bn, representing a 1.3 per cent drop from 2023.

Despite the spending cut, MTN accelerated Capex deployment in the fourth quarter of 2024 to accommodate stronger-than-expected data traffic growth.

However, Capex intensity, which measures infrastructure investment as a percentage of revenue, fell from 18.2 per cent in 2023 to 13.2 per cent in 2024, reflecting a more cautious financial approach.

“In light of the substantial progress in reducing the forex exposure from our LC obligations, we accelerated Capex deployment in Q4 to accommodate the stronger-than-expected data traffic growth on our networks,” MTN stated.

In addition to these spending cuts, both Nigeria and Airtel Africa are grappling with financial pressures from rising inflation, which has affected their ability to invest in infrastructure.

To mitigate this, the operators are implementing a 50 per cent tariff hike, a move expected to help them stay afloat and allocate more funds to capital expenditure.

The tariff adjustment is anticipated to generate additional revenue that could ease financial strain and support further investments in network expansion, particularly in 5G deployment and rural connectivity initiatives.