MTN blames loadshedding for huge contract price increases
In a surprising move, MTN, one of Africa’s largest telecom companies and a prominent provider of mobile phone and internet contracts in South Africa, has announced substantial price hikes across almost all its post-paid contract offerings, impacting a significant portion of its customer base.
Customers paying monthly for contracts will encounter an average increase of 4.3 percent on their bills, encompassing various components such as insurance, device fees, out-of-bundle spend, and itemized billing. This adjustment is set to be implemented from February 1, 2023. MTN attributes the increase to several economic factors affecting South Africa, including the exponential growth in demand for data services, putting strain on telecom networks. The company has been investing in network infrastructure improvements while grappling with the rising costs associated with ensuring resilience during load shedding, inflationary pressures, and heightened incidents of battery theft and site vandalism.
Ernst Fonternel, MTN SA Chief Consumer Officer, explained, “The price adjustment will enable us to enhance our network resilience to ensure that our customers experience improved network stability and reliability.” Additionally, the telecom giant cites the impact of a generally weaker Rand against the Dollar, given its operations across 19 markets, primarily in Africa and the Middle East.
Despite facing challenges, MTN reported easing inflation in its African markets during the third quarter of 2023, posting robust group revenues of R156.3 billion and an increase to 290.1 million paying monthly subscribers. Notably, the operator invested significantly in energy infrastructure to combat load shedding, registering nearly 100 percent resilience against blackouts in Gauteng as of November 2022.
Specific adjustments in pricing include an average increase of R0.11 for out-of-bundle voice rates, while out-of-bundle data rates will see a marginal increase of R0.04 per megabyte used. Subscription fees are set to rise by an average of 8.8 percent. However, certain aspects such as device fees, insurance premiums, and add-on voice/data bundle prices will remain unchanged.
A detailed breakdown of the monthly subscription and contract plan price increases effective February 1 reveals widespread impacts, with notable exceptions including Home Internet Premium, Home Internet Ultra, Home Internet Infinite, and the recently launched MTN SuperFlex line. Products like Mobile Internet Silver, Mobile Internet Ruby, Mobile Internet Diamond, MTN Mega Gigs M, MTN Mega Talk M, and the entire MyMTN Sky line will witness significant price hikes, with MyMTN Sky Platinum contracts facing the highest average monthly increase of R200.