MTN Nigeria saved $5.89 million in 2025 by shifting more of its power consumption to gas, but the savings barely dented an energy cost structure still dominated by diesel, as Africa’s largest mobile network operator warned that rising fuel prices could wipe out up to $102 million in annual earnings.
The figures, drawn from the company’s 2025 Sustainability Report and its first-quarter 2026 financial results, expose a deepening tension at the heart of Nigeria’s digital economy: surging demand for data services is generating strong revenue, but powering the infrastructure behind that growth is becoming increasingly expensive.
MTN Nigeria consumed over one million gigajoules of energy in 2025, equivalent to approximately 277 million kilowatt-hours, reflecting the scale of operations across its base stations, data centres, switching facilities, offices and vehicle fleet. Diesel accounted for 58.11 percent of total energy consumption, far exceeding gas-powered Independent Power Producers at 23.63 percent and electricity from the national grid at 18.04 percent. Renewable sources including solar contributed just 0.05 percent.
Gas-powered electricity and inverter solutions together saved the company approximately 8.5 billion naira in 2025, with gas accounting for 8.1 billion naira of that figure. A further 352.6 million naira was saved through high-efficiency cooling systems and inverter installations. However, with operational expenses running at 1.39 trillion naira ($1.01 billion), the savings remained marginal relative to overall costs.
MTN Nigeria’s Chief Executive Officer Karl Toriola warned in the Q1 2026 report that the company expects a 1.8 to 2.0 percentage point decline in full-year Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margins if diesel prices average 2,000 naira per litre in the second half of 2026. At current revenue levels, a two percentage point margin drop translates into an estimated 140 billion naira ($102 million) hit to profitability.
The irony of the situation is stark. MTN Nigeria posted a 165.9 percent surge in profit after tax to 355.5 billion naira in the first quarter of 2026, driven by a 41.8 percent rise in service revenue. Data revenue alone grew 56.2 percent. Yet each gigabyte now costs more to deliver as energy expenses outpace revenue gains.
Nigeria’s natural gas reserves, estimated at over 215 trillion cubic feet, offer a potential alternative to diesel. However, gas supply constraints have already affected power generation nationwide, with 16 of the country’s 33 power plants reportedly operating below capacity or sitting idle in early 2026 due to fuel shortages, raising questions about how quickly the transition can scale.
An analysis of where the energy goes illustrates why switching fuels is so difficult. Data centres alone consumed 38.2 percent of total electricity use, reflecting the surge in digital infrastructure demand. Base transceiver stations (BTS) accounted for 31.6 percent, switching facilities 21.2 percent, and office buildings 8.7 percent. These high-demand facilities require constant, reliable power, which renewable sources cannot yet supply at scale.
Greenhouse gas emissions from MTN Nigeria’s direct operations and electricity use stood at approximately 106,588 tonnes of carbon dioxide equivalent in 2025, a 4.8 percent increase over the prior year, driven by network expansion and greater reliance on diesel due to grid instability, Toriola noted.
Telecom operators across Nigeria consume more than 40 million litres of diesel monthly to power network infrastructure, according to the Africa Finance Corporation’s State of Africa’s Infrastructure Report 2025, translating into more than 480 million litres annually and industry-wide spending estimated at over $350 million.
The MTN Nigeria case underscores a challenge shared across Africa’s telecom sector: rapid digital growth is structurally dependent on reliable energy, and in markets where grid infrastructure remains underdeveloped, that dependency is proving costly for operators and the consumers they serve.
