MTN flags impact of load shedding on South African business.
- MTN’s local operating conditions are impacted by load shedding, inflationary pressures and constrained consumer spending.
- The company closed the first quarter with 276 million subscribers across all operational markets, up 3.2%.
- MTN has 34.5 million subscribers in South Africa and 17.3 million active data subscribers.
Ghana and Nigeria led the growth stakes during MTN’S first financial quarter with the telecom company’s overall pre-tax earnings rising 21%, according to an operational update released on Friday.In South Africa, its second-biggest market after Nigeria, service revenue edged 4.6% higher. Tough operating conditions at home included the rampant power outages and constrained consumer spending, contributing to what is seen by the group “challenging operating environment”.”In South Africa, load shedding from the national grid has impacted network availability and we have to increase investment in batteries ahead of the winter period when we anticipate that the risk of load shedding may remain high,” said Group CEO Ralph Mupita.Eskom, the country’s state-owned power supplier has been battling outages, with a record number of trips this year. “Network availability and quality [have] been affected by load shedding from the national grid, as well as ongoing theft and vandalism of towers since Q4 2021,” the company said.To mitigate the impact of outages on connectivity, mobile operators including MTN, deploy batteries and generators to keep towers operating. There has also been a threat of the theft of the batteries that keep the infrastructure running adding to challenges faces by companies. MTN SA closed the quarter with a total of 34.5 million subscribers and a R4.9 billion profit before tax, up 3.7% year-on-year. According to the company, growth was supported by service revenue performance and disciplined execution of the expense efficiency programme. There was a data traffic growth of 46.7% and a 14.1% increase in active data users to 17.3 million.The Pan-African operator stated that MTN SA’s performance outlook would be shaped by macroeconomic conditions in the country such as load shedding, as well as current global macroeconomic uncertainties that are expected to add to inflationary pressures, including on costs and availability of food and fuel.According to MTN, South Africa’s prepaid consumer is under pressure, but the company is committed to accelerating growth in MTN SA and MTN Nigeria, where it is dealing with a directive from Nigeria Communications Commission which stated that all operators should restrict outgoing calls for subscribers whose SIMs are not associated with their national ID numbers.MTN Nigeria saw a drop in traffic following its compliance with the directive.”However, as we execute our NIN recovery initiatives, there has been a gradual turnaround as the affected subscribers are reconnected to resume voice calls.”MTN group subscribers increased 3.2% to 276.2 million, and the rate was impacted by Nigeria SIM registration regulations. Active data users are up 13.1% to 125.6 million. MTN Nigeria, with service revenue up 22.0%, is the second biggest contributor after Ghana, at 34.7%.The company increased its localisation of MTN Ghana from 17.5% to 18.7% in the first quarter, gathering R272 million from the transaction.
