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MTN Plans to Increase Tariff in Selected African Markets as Inflation Bites Harder

MTN Plans to Increase Tariff in Selected African Markets as Inflation Bites Harder

Telecommunications giant MTN has revealed plans to increase its Tariff in South Africa, Nigeria, and other selected African markets as inflation bites harder.

In its recently released first quarter (Q1) report, the company revealed that the decision is to cushion the effect of inflation which rose from 11.5 percent last year to 18.5 percent in the Q1 of 2023.

The company’s group president and CEO Ralph Mupita disclosed that MTN’s resilient business model and operational execution have enabled it to continue to successfully navigate difficult macroeconomic, geopolitical, and regulatory conditions in the first quarter of 2023.

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Speaking on its outlook for the rest of 2023, MTN said, “We anticipate that trading conditions across markets will remain challenging for the remainder of 2023 and we will continue to execute on our proactive measures to manage the near-term challenges and risks.

“Within this environment of elevated inflation, implementing selective price increases across the portfolio remains a critical priority to ensure that operations generate sufficient cash flows to fund future capital expenditure needed for building world-class networks. We will continue to have the necessary engagements with the regulatory authorities on such needed increases.”

The blended inflation across the company’s footprint remained elevated and averaged 18.5% in Q1 2023, compared to 11.5% in Q1 2022. Interest rates increased during the period as central banks acted to curb inflation. Higher inflation and interest rates weighed on consumers’ spending power and impacted business activity.

In South Africa, MTN network availability remained under pressure due to ongoing power outages across the country. There were approximately 90 days of load shedding in Q1 2023 compared to 14 days in Q1 2022.

Against this challenging backdrop in South Africa, the company continued to implement proactive measures to sustain top-line growth and mitigate against inflationary pressure. In support of these interventions, it invested R6.4 billion in its networks and platforms in Q1 2023.

Aligned with the company’s portfolio optimization focus within its Ambition 2025 strategy, MTN continuously assesses its investments to improve returns and reduce risk.

In line with this, the telecoms giant is planning an orderly exit of three operations in West Africa, which are MTN Guinea-Bissau, MTN Guinea-Conakry, and MTN Liberia. In this regard, the company has received an offer for its assets from Axian Telecom, which is being evaluated.

As it looks to manage the current challenging trading environment, MTN has disclosed that it will remain focused on implementing certain initiatives to continue expanding its connectivity and platform ecosystems to sustain growth.

In Nigeria, the company will focus on enhancing network capacity, accelerating 4G, 5G, and rural coverage, as well as driving home broadband to sustain growth in data traffic. For its fintech subsidiary MoMo PSB, the company is focused on developing the agent and merchant ecosystem that will support the growth of the wallet base and position the MoMo to be a material contributor to the growth of the group fintech business over the medium-term.

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