MTN South Africa invests R10.1 billion in network resilience amid last year load shedding challenges.
MTN South Africa Invests R10.1 Billion in Network Resilience
In 2023, MTN South Africa faced the daunting challenge of severe load shedding impacting its network performance and customer satisfaction. To combat this, the telecom giant embarked on a resilience plan, investing a staggering R10.1 billion in its network infrastructure.
The investment not only mitigated the risk of customer attrition but also yielded significant improvements in network availability, surpassing expectations and enhancing customer satisfaction.
By December 2023, MTN South Africa’s network availability had significantly improved to approximately 95%, surpassing expectations and leading to heightened customer satisfaction, as indicated by a notable increase in the Net Promoter Score.
The company witnessed a 2.4% increase in its subscriber base, reaching 37.4 million, with noteworthy growth in both post-paid and prepaid segments.
Revenue Dynamics
While service revenue saw a modest increase of 2.5%, outgoing voice revenue experienced a decline of 12.1%. However, data revenue, along with enterprise, wholesale, and fintech revenues, recorded positive growth rates.
MTN South Africa’s national roaming revenue surged by 26.1%, driven by agreements with Cell C and Telkom.
Data now constitutes nearly half (47.8%) of the company’s service revenue, with substantial growth in data traffic and consumption among both prepaid and postpaid subscribers.
Despite revenue growth, earnings before interest, tax, depreciation, and amortization (EBITDA) declined by 5.8%, primarily due to top-line pressures and increased network resilience costs.
Commitment to Cost Optimization Initiatives
MTN South Africa remained committed to cost optimization initiatives to safeguard profitability and cash flows. Looking ahead to the 2024 financial year, MTN anticipates continued pressure in the prepaid market and expects “base effects” to impact growth in the wholesale segment.
Nevertheless, the company remains focused on returning to targeted medium-term growth and EBITDA margin ranges.
Aims to Conclude its Network Resilience Investment Soon
Front-loading investments in the device market is part of its strategy to strengthen market position and revenue share, despite potential short-term margin pressures.
Furthermore, MTN South Africa aims to conclude its network resilience investment by the first quarter of 2024, signaling its commitment to enhancing network quality and driving sustainable growth in the years ahead.
ALSO CHECK:
