After a rough 2023, MTN, Africa's largest mobile operator by subscribers, is showing signs of a comeback. The company's stock price has been on the rise in recent weeks, buoyed by a strengthening Nigerian naira.
MTN's fortunes are closely tied to the health of the Nigerian economy, as its largest business is located there. The price of oil, Nigeria's main export, has historically played a big role in MTN's share price. In early 2022, when oil prices soared after Russia's invasion of Ukraine, MTN's stock reached its peak.
However, 2023 brought new challenges. Nigeria's new foreign exchange policy, implemented in June, allowed the naira to be determined by market forces instead of government control. This led to a significant devaluation of the naira, which hurt MTN's earnings. The company's share price plunged from a high of R144 in June to R82.10 by early March.
The tide seems to be turning for MTN in recent weeks. The naira has strengthened by 27% against the dollar, and MTN's stock price has risen 12% over the same period. This positive momentum is giving hope to the company, Nigerians, and investors alike.
MTN's overall business remained resilient in 2023 despite the challenging economic conditions. The company's subscriber base grew to 295 million across its 19 markets. Data and fintech services are in high demand, with the number of active data subscribers growing by more than 9% and active mobile money users increasing by 5%.
Looking ahead, MTN is pushing forward with growth initiatives. The company plans to separate its fiber infrastructure business and is investing in building out its network across Africa. Additionally, MTN's successful fintech unit has attracted investment from Mastercard, highlighting the potential of this new revenue stream.
Analysts believe that MTN's separation of its fiber business and the growth of its fintech unit offer promising prospects for the company. However, both segments face challenges such as regulation and competition. MTN's success will depend on its ability to navigate these challenges effectively.
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