MTN mulls hike in calls, data rates

Telecom group, MTN, has declared that it was planning to increase prices in selected markets due to the elevated inflation in the operating environment. This was disclosed in its first quarter report filed on the Johannesburg Stock Exchange.

In its outlook for the rest of 2023, the MTN group stated that, “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 telecom company, which operates across 19 countries including South Africa, Nigeria, and Ghana, said the blended inflation across its footprint remained elevated and averaged 18.5 per cent in Q1 2023, compared to 11.5 per cent in Q1 2022.

Interest rates increased during the period as central banks acted to curb inflation. It claimed that higher inflation and interest rates weighed on consumers’ spending power and impacted business activity.

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MTN’s chief executive officer, Ralph Mupita, in the statement, said, “MTN’s resilient business model and operational execution enabled us to continue to successfully navigate difficult macro-economic, geopolitical and regulatory conditions in Q1 2023.

“Local currencies generally weakened against the dollar, and foreign exchange availability was limited in several of our key markets affecting the pace of capital expenditure and our ability to upstream dividends and management fees.

“Over and above reduced economic activity in South Africa, MTN South Africa’s 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.”

On the Nigerian market, it stated that, “MTN Nigeria drove strong commercial momentum in a challenging operating environment to deliver a strong financial performance in the period.

“In addition to higher inflation and interest rates as well as challenges with the availability of hard currency liquidity, the Nigerian economy was also impacted by the Central Bank of Nigeria’s redesign and introduction of new naira notes from December 15, 2022.

The limited availability of new notes resulted in cash shortages which impacted customers’ ability to recharge through physical channels and transact within the MoMo agent network.”

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However, subscribers to telecommunications services who spoke with Blueprint Weekend bemoaned their fate as the cost of using the services as currently being provided by the telecoms operators have become exorbitant, adding that it was becoming more difficult to keep pace with high costs of telecoms services.

 Of particular concern to many users of MTN’s services is the issue of broadband services, also known as data. Most respondents on the topic stated that it is rather too expensive to subscribe to data service nowadays, stating that it was not like this before with many wondering why it would be so, especially given the high cost of living in the country.

However, in his reaction, the president of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, said calls and the usage of data should be made to reflect the cost of doing business in Nigeria.

He said: “It is apparent that tariffs for phone calls and the usage of data to perform online operations and partake in online virtual meetings will require innovative pricing that reflects the costs of doing business in Nigeria.