MTN Nigeria has posted a profit after tax of N355.5bn for the first quarter of 2026, a surge of 165.9 per cent year-on-year, underscoring the resilience of the country’s largest telecom operator despite mounting cost pressures.

The performance, contained in the firm’s unaudited Q1 results, reflects strong growth in data and voice revenues, as well as continued expansion of its digital and fintech services. However, the company warned that soaring energy costs, particularly diesel, could erode margins in the months ahead.

MTN, which serves about 89.5 million subscribers and runs more than 20,000 base stations nationwide, remains heavily dependent on diesel-powered generators because of Nigeria’s unreliable electricity grid. This structural weakness in the power sector has turned fuel into one of the operator’s most critical and volatile cost lines.

Chief Executive Officer Karl Toriola said the company is closely tracking developments in the operating environment, highlighting energy price volatility and regulatory dynamics as key risks to its outlook.

Management estimates that if Lagos ex-depot diesel prices average N2,000 per litre in the second half of the year, full-year Earnings Before Interest, Taxes, Depreciation and Amortisation margins could shrink by 1.8 to 2.0 percentage points. Such a hit would be significant for a business that relies on high capital intensity and stable cash flows to fund network expansion.

The warning comes against the backdrop of heightened turbulence in global oil markets. Geopolitical tensions involving the United States, Israel and Iran have disrupted flows around the Strait of Hormuz, pushing crude prices above $100 per barrel and inflating fuel import costs worldwide.

In Nigeria’s deregulated downstream sector, the ripple effects have been stark. Diesel prices have climbed sharply, with the Dangote Refinery adjusting its ex-depot diesel price to N1,750 per litre, while independent marketers in some states reportedly sell at around N1,250 per litre at the pump.

According to the Africa Finance Corporation’s State of Africa’s Infrastructure Report 2025, Nigerian telecom operators collectively consume more than 40 million litres of diesel every month to power their networks, translating to over 480 million litres annually and an estimated industry spend exceeding $350m.

Despite these headwinds, MTN has accelerated capital investment. Capital expenditure, excluding right-of-use assets, jumped 92.8 per cent year-on-year to N390.3bn from N202.4bn. The company said much of this spending is directed at boosting network capacity and deepening its fixed broadband presence through fibre-to-the-home deployments and fixed wireless access infrastructure.