Inside MTN Nigeria’s N3trn H1: Network investment, taxes and diesel bill

MTN Nigeria’s record N3 trillion first-half revenue is revealing the unusually high cost of keeping a nationwide telecommunications network running, with the company spending heavily on infrastructure, government charges and energy before earnings reach shareholders.

Behind the headline revenue figure is a business that Modupe Kadri, the chief financial officer at MTN Nigeria, at the MidYear Y’elloVerse Catch up, in Lagos, said, must continuously reinvest in its network simply to keep pace with Nigerians’ rapidly growing appetite for data.

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MTN invested approximately N621 billion in capital expenditure in the first six months of 2026, while paying about N622 billion in taxes, levies and regulatory charges, according to Kadri.

The company’s network also spent an estimated N29.75 billion on diesel during the period, equivalent to an average of about N164.38 million every day, as it maintained power at network sites amid Nigeria’s unreliable electricity supply.

The figures illustrate why MTN’s N3 trillion revenue cannot be treated as equivalent to profit. The company reported approximately N797.9 billion in profit after tax, meaning about 26.6 percent of revenue remained as profit after the various costs and charges reflected in its accounts.

Kadri’s broader explanation was that telecommunications is a capital-intensive, infrastructure-heavy business in which investment never really stops.

A N3trn revenue stream

MTN’s N3 trillion revenue was supported by strong growth in data services, which generated approximately N1.7 trillion, making data the company’s largest revenue stream.

The business reported EBITDA of about N1.7 trillion, representing an EBITDA margin of approximately 56 percent.

But maintaining that level of operating performance requires continuous spending.

The N621 billion capital expenditure during the first half went into strengthening and expanding the network, including sites, capacity, fibre and other telecommunications infrastructure.

Kadri said MTN operates approximately 62,200 network sites and has deployed around 43,000 kilometres of fibre across Nigeria.

The scale of that infrastructure helps explain why the company cannot simply harvest revenue from existing customers without continuing to invest.

Every increase in data consumption puts additional pressure on the network.

MTN said data traffic has risen by about 24.8 percent, driven by Nigerians’ increasing use of video streaming, social media, remote work, digital banking, online education and other internet services.

The figures demonstrate why electricity is not merely an operating detail for telecom companies. It is a central component of network economics.

Kadri said customers do not care whether a network operator is receiving electricity from the national grid, a generator or another source. They simply expect their phones and internet connections to work.

That forces operators to build redundancy into their energy systems. MTN uses a combination of grid electricity, diesel generators, batteries, independent power producers and, increasingly, renewable sources such as solar.

The NCC gets a slice before shareholders

Government is another major recipient of MTN’s revenue.

Kadri said MTN had paid approximately N622 billion in taxes, levies and regulatory charges from January, covering corporate income tax, the Nigerian’s Communications Commission, NCC’s Annual Operating Levy, VAT, customs duties and other statutory payments.

The NCC’s Annual Operating Levy is particularly important because the commission’s licensing framework provides for a levy of 2.5 percent of a licensee’s audited net revenue.

Applied simply to MTN’s approximately N3 trillion H1 revenue, 2.5 percent represents roughly N75 billion.

The broader point is that a significant portion of the money generated by telecom services ultimately flows outside the company through taxes, regulatory charges and other statutory obligations.

Distributors and the cost of reaching customers

MTN also does not retain all the revenue generated from millions of customers.

Kadri said substantial amounts flow through the company’s distribution ecosystem, including dealers, distributors, retailers and other trade partners.

This nationwide distribution network is necessary because telecommunications revenue is generated at enormous scale through relatively small customer transactions.

Kadri said the average subscriber spends about N5,200 per month on data, equivalent to roughly N180 per day.

The economics therefore depend on scale.

Millions of customers buying data, making calls and using digital services ultimately generate the billions of naira that appear as MTN’s revenue.

Spectrum is another bill

The next major demand on the company’s finances is spectrum.

Kadri compared spectrum to a pipeline: the more spectrum available, the more data an operator can carry using existing infrastructure.

But spectrum is finite. As customers consume more data, operators have two broad choices: build more sites or acquire and optimise additional spectrum.

Both options require capital. In densely populated cities such as Lagos, building additional sites can become increasingly difficult because land is scarce, planning requirements are complex and landlords can restrict access.

That means spectrum becomes increasingly important as a way of expanding capacity without endlessly adding physical towers.

Fibre will require more long-term capital

MTN is also putting money into fibre broadband. Kadri disclosed that the company currently has about 150,000 active fibre broadband customers and expects the business to grow.

But fibre is a long-term investment. Connecting a residential estate requires significant upfront spending, yet there is no guarantee that enough residents will immediately subscribe.

That creates a payback period between the initial infrastructure investment and the point at which customer revenue begins to justify the capital deployed.

For MTN, the calculation is therefore not simply whether Nigerians want fibre, but whether the density of potential customers in a particular location can support the economics of deployment.

The cost of 5G and devices

MTN must also spend to expand 5G while confronting a separate problem: device affordability.

The company does not want to become a major device distributor because holding large inventories exposes it to the risk that technology becomes outdated before the devices are sold.

Instead, MTN is working with original equipment manufacturers to encourage affordable smartphone adoption.

This matters because network investment alone cannot create 5G usage.

A customer needs a 5G-compatible device and must be located within suitable coverage.

The company therefore has to balance spending on 5G infrastructure with the affordability of the devices required to use it.

Fintech is becoming another capital allocation decision

Beyond the core network, MTN is also investing in digital financial services. Its fintech operations are structured separately from the telecommunications parent, with partnerships supporting services such as digital lending.

Kadri said the separation of the fintech business is progressing but still requires regulatory approval from the Central Bank of Nigeria.

The fintech business could therefore become an increasingly important component of MTN’s growth strategy, particularly as traditional voice revenue declines and customers spend more of their digital lives on financial and internet-based services.

Shareholders also expect returns

After paying operating expenses, taxes, regulatory charges and funding network investment, MTN must also deliver returns to shareholders.

The company has more than 200,000 direct shareholders, while millions of Nigerians have indirect exposure through pension funds that hold MTN shares.

Dividends are therefore another channel through which MTN’s earnings flow out of the company.

Kadri also said MTN contributes one percent of profit after tax annually to the MTN Foundation, which has invested more than N34 billion in almost 1,100 projects spanning healthcare, education and economic empowerment.

The company has also committed capital to national infrastructure through the Road Infrastructure Tax Credit Scheme.

Why N3trn revenue does not equal N3trn cash

The broader picture emerging from MTN’s H1 results is that telecommunications revenue passes through several competing claims before it becomes distributable profit.

Network expansion takes capital; Energy consumes cash; Spectrum requires investment; Taxes and regulatory charges go to government; Dealers and distributors receive commissions; Fibre requires upfront investment before customer adoption; 5G requires infrastructure while customers still need affordable devices; Fintech requires capital and regulatory compliance; Shareholders expect dividends and appreciation and network equipment must eventually be replaced or upgraded.

That is why Kadri’s explanation of MTN’s N3 trillion revenue is ultimately an explanation of the economics of scale.

Read also: MTN says it is a local company in every market it operates

MTN can generate enormous revenue because it serves about 92 million of Nigerians and operates one of the country’s largest digital infrastructures. But the same scale that creates the revenue also creates an enormous cost base.

For Nigeria’s telecom industry, data consumption is growing faster, networks require more capacity, energy remains expensive and unreliable, and operators must invest continuously simply to prevent service quality from falling behind demand.

MTN’s first-half numbers therefore tell two stories at once. The first is the story of a company whose revenue has been transformed by Nigeria’s data boom. The second is the story of an infrastructure business that must spend billions of naira every month to keep that digital economy running.

In that sense, the most revealing number may not be the N3 trillion at the top of the income statement. It may be the huge litres of diesel being consumed every day to keep the network behind that revenue alive.