MTN Nigeria Sustains Commercial Momentum As Company Rues Global Inflation

Leading telecoms giant MTN has announced that it is planning to increase prices in selected markets due to the elevated inflation in the global market.

The information was made available during its first quarter report filed on the Johannesburg Stock Exchange on Thursday. 

Regarding its outlook for the rest of 2023, the MTN group 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.”

According to the telecom giant operating across 19 countries including South Africa, Nigeria and Ghana, 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. 

Higher inflation and interest rates weighed on consumers’ spending power and impacted business activity, the company said.

MTN Chief Executive Officer, Ralph Mupita, added his voice in the statement, “MTN’s resilient business model and operational execution enabled us to continue to successfully navigate difficult macroeconomic, 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.”

Meanwhile, from the Nigerian market scene, the Group said, “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 15 December 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.”

MTN Group disclosed that in line with its Ambition 2025 strategy, it continuously assessed investments to improve returns and reduce risk. 

Thus, MTN Group said it was evaluating an orderly exit of three operations in West Africa over the medium term which are MTN Guinea-Bissau, MTN Guinea-Conakry and MTN Liberia.

The Group has received an offer for our equity interests in these Opcos, from Axian Telecom, which is being evaluated.

It said it was also in the process of exiting Afghanistan through the sale of MTN’s entire shareholding to a wholly-owned subsidiary of M1. 

According to the report, MTN revenue rose 15.6 per cent to 53.83bn rand ($2.8bn) in the first quarter of 2023 compared to 45.69bn rand in the first quarter of 2022, the company said.

Total subscribers increased by 5.2 per cent to 290.6m, active data subscribers up by 11.9 per cent to 140.4m, data traffic increased by 19.3 per cent and fintech transaction volumes increased by 38.8 per cent to 4.1bn.