MTN Group, a prominent player in the global telecoms industry, has announced its plans to raise tariffs in Nigeria, South Africa, and select African markets. The aim of this decision is to mitigate the impact of soaring inflation, which has surged from 11.5% last year to 18.5% in the first quarter of 2023.

In its recently published first-quarter report, MTN highlighted the factors contributing to inflation on the continent, including the ongoing conflict between Russia and Ukraine and the substantial debt accumulated by several African countries during the height of the Covid-19 pandemic.

Given the prevailing environment of elevated inflation, implementing targeted price increases across our portfolio remains a crucial priority,

stated MTN Group.

This is not the first time that MTN has informed consumers about its intention to raise tariffs. Last year, the telecommunications company announced tariff adjustments in the South African market to cope with inflation. Apart from grappling with high inflation rates, South Africa, MTN's home base, has been plagued by frequent power outages known as load shedding, adversely affecting numerous businesses.

Load shedding refers to the controlled distribution of electrical power across multiple sources to alleviate strain on the primary energy source when electricity demand exceeds supply. This operational challenge has posed significant difficulties for MTN, which experienced 47 days of load shedding in just October and November of 2022 and 53 days in Q3 of the same year. Additionally, MTN has increased its budget for preventing vandalism to avoid service disruptions.

Nigeria, one of MTN's key markets, has presented challenges for conducting business this year. The combination of an ill-conceived currency redesign policy and intermittent service disruptions for Nigerian banks has resulted in protests, ATM vandalism, high point-of-sale transaction fees, and widespread hardship for the average citizen.

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MTN's trading report acknowledged that the currency redesign policy, which significantly reduced the circulation of banknotes, severely impacted its operations in Nigeria. Karl Toriola, the CEO of MTN Nigeria, explained that

The limited availability of new notes resulted in cash shortages, affecting our customers' ability to recharge through physical airtime vouchers (primarily affecting customers without access to digital recharge channels) and over-the-counter (OTC) transactions within our MoMo agent network.

Despite the challenges faced, MTN achieved notable milestones. It recorded a 20.4% increase in service revenue, driven by its core sectors such as voice, data, fintech, and digital services. The company also expanded its mobile subscriber base to 76.8 million, a growth of 9.4%. Furthermore, MTN Nigeria gained an additional 167,000 home broadband users, reaching a total of 1.4 million broadband consumers. The deployment of 5G fixed wireless access devices, mobile broadband solutions, and fibre-to-the-home connectivity contributed to this accomplishment.

Nevertheless, tariff hikes alone will not resolve all of MTN's challenges. The company anticipates a more difficult period towards the end of the year but remains determined to address challenges proactively as they arise.

We anticipate that trading conditions across markets will remain challenging for the remainder of 2023, and we will continue to execute proactive measures to manage the near-term challenges and risks,

stated the company in its report.

To enhance service delivery in South Africa, MTN plans to invest more in off-grid power solutions to ensure uninterrupted connectivity for consumers. In Nigeria, the company will focus on expanding network coverage, particularly in rural areas. Recently, MTN renewed its 3G license, indicating its commitment to supporting customers using the 3G network. Additionally, MTN is closely monitoring the situation in Ghana and remains hopeful that inflationary pressures will ease soon.

Furthermore, MTN has pledged to engage in discussions regarding the proposed tariff increases with regulatory agencies.