MTN Nigeria completes allotment of 4mn incentive shares

MTN Nigeria recently completed the allotment of about 4 million incentive shares to over 120,300 investors who participated in the December 2021 to January 2022 offer. This move has garnered much attention in the telecom sector, with analysts like Victor Ejugwu, a Telecom analyst at Vetiva, discussing the company's performance and future trends. MTN and Airtel Nigeria have shown promising signs with attractive earnings per share and dividend yields, making them a lucrative option for investors. MTN, in particular, has been a standout performer, reaching a 2 trillion Naira revenue milestone in 2022. The company's data business has been the main driver of growth, leading to strong top-line and profit growth. This success has translated into improved dividend yields, further boosting investor confidence in both Airtel and MTN. Looking ahead, analysts like Ejugwu forecast continued growth for MTN this year, expecting the data business to maintain its upward trajectory fueled by the increasing digital adoption and the need to be online. Improved profitability is also on the horizon, with an anticipated rise in turnover driving earnings for the company. As a result, another round of dividend growth is expected in the near future. Despite the positive outlook, operational costs remain a concern for telecom companies like MTN. Operating costs, including regulatory fees, have been on the rise, posing challenges to profitability. However, companies are implementing strategies to mitigate these costs, such as MTN's shift towards solar energy to reduce dependence on fossil fuels like diesel. Additionally, the surge in revenue has helped cushion the impact of rising operating expenses. Looking at the broader telecom landscape, significant investments in infrastructure are anticipated. With the growing importance of the internet and the impending arrival of 5G technology, telecoms are expected to ramp up their investments in network and internet infrastructure. This expansion aims to enhance coverage and drive user growth, aligning with the evolving digital landscape. Mobile money business is another area of interest, with companies like Airtel and MTN focusing on expanding their agent networks for greater market penetration. The emphasis is currently on building a robust network of agents before shifting focus towards profitability and growth in this segment. As we look ahead to the rest of the year, a key highlight for telcos is the expected strong growth in the data business. The rollout of 5G services and the expansion of network infrastructure are likely to attract more users and drive revenue growth. With a positive outlook for the data business, improved dividend yields and continued investments in infrastructure, the future looks bright for MTN Nigeria and the telecom sector as a whole.