October 5, 2026/CSL Report
Nigeria’s telecommunications sector entered 2026 on a stronger footing, supported by tariff rebalancing, recovering subscriber numbers, sustained data demand, and improving operator profitability. The sector continues to transition from a voice‑led model toward data‑driven growth, with smartphone adoption, broadband expansion and rising data consumption providing structural support for revenue growth. Active mobile subscriptions increased to 195.1 million in July 2026, up 15.2% y/y, supported by the reactivation of previously deactivated SIMs and continued subscriber additions. MTN Nigeria remained the market leader, surpassing 100.0 million subscribers, while Airtel Nigeria reached 66.8 million. Data remained the key growth driver, with MTN’s H1 2026 data revenue rising 38.4% y/y to ₦1.7 trillion, while Airtel Africa reported 36.5% growth in group data revenue to US$750.0 million.
Improved pricing and strong data demand translated into significant earnings growth. MTN Nigeria’s H1 2026 revenue increased by 25.9% y/y to ₦3.0 trillion, while EBITDA rose 39.2% y/y to ₦1.7 trillion, expanding the EBITDA margin to 55.9% compared to 50.6% in H1 2025. Airtel Africa recorded 31.0% y/y revenue growth to US$1.9 billion and 36.7% y/y EBITDA growth to US$928 million in Q1 2027, with the EBITDA margin improving to 50.1%, up from 48.0% in Q1 2026. The sector’s medium‑term outlook remains supported by continued investment in 4G and 5G capacity, fibre infrastructure, and network coverage. However, rising traffic is placing greater pressure on network capacity, energy consumption, and capital expenditure. Infrastructure sharing, spectrum availability, fibre deployment, and energy‑efficient network solutions will therefore remain important to protecting margins and returns on invested capital.
While 5G deployment is progressing, the focus is increasingly shifting from coverage to monetisation through higher‑value data plans, fixed wireless access, enterprise connectivity and IoT applications. Similarly, cloud, data centres, and enterprise digital services offer longer‑term opportunities, although consumer connectivity remains the primary earnings driver. Telecom‑led fintech remains underpenetrated relative to subscriber scale, with competitive pressure from banks and fintech platforms limiting their near‑term contribution.
We forecast MTN Nigeria’s FY 2026 revenue and PBT at ₦6.6 trillion and ₦2.4 trillion, respectively, representing increases of 27.4% and 43.4% y/y from ₦5.2 trillion and ₦1.7 trillion in FY 2025. Similarly, we project Airtel Africa’s FY 2027 revenue and PBT at US$8.3 billion and US$1.7 billion, respectively, representing increases of 22.5% and 71.0% y/y from US$6.4 billion and US$1.4 billion recorded in FY 2026. We expect both operators to benefit from sustained data demand, tariff adjustments, subscriber growth and operating leverage. However, earnings growth is likely to moderate overtime as the initial impact of tariff increases gradually normalises. Overall, we maintain a BUY recommendation on MTN Nigeria with a target price of ₦1,015.50/share, implying 20.9% upside from the ₦840.00/share closing price, while we retain a HOLD rating on Airtel Africa with a target price of ₦7,125.54/share, implying 13.1% upside from the ₦6,300.00/share closing price. Share prices are as of 2 October 2026.
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