South Africa’s largest mobile operator, MTN Group Ltd., has boosted its network availability to 95% in its home market despite facing challenges such as power outages, vandalism and a sluggish economy.
The company said on Tuesday that it invested 10.6 billion rand ($577 million) in capital expenditure and leases year-to-date in South Africa, plus another 1.9 billion rand to add spectrum in its biggest market. The spending was necessary to lift network capacity strained by the country’s deepening energy crisis that can inflict daily electricity cuts, known locally as load shedding.
“Power outages in South Africa continued to be a challenge,” MTN Group President and Chief Executive Officer Ralph Mupita said in a statement. “However, the significant progress made in our network resilience program, combined with lower load shedding during the third quarter, supported average network availability above 95%.”
MTN upgraded its sites with batteries, generators, renewable energy and enhanced security to cope with the power cuts, which have been plaguing the country for more than a decade. The company also said it improved its network quality and coverage, especially in rural areas, and expanded its 4G and 5G services.
MTN’s investment in South Africa comes when the country struggles to deal with an electricity shortage that is hampering economic growth and job creation. The state-owned power utility, Eskom, has been unable to meet demand due to ageing infrastructure, mismanagement and corruption. The government has been trying to reform the sector and allow more private participation, but progress has been slow.
According to the World Bank, South Africa’s electricity supply is among the most unreliable in the world, ranking 114th out of 141 countries in the 2023 Global Competitiveness Report. The report also found that the country’s electricity tariffs are among the highest in the world, ranking 136th out of 141 countries.
The power crisis has also affected other sectors, such as mining, manufacturing and tourism, which are vital for the country’s recovery from the Covid-19 pandemic. The South African economy contracted by 7% in 2020, the worst performance since 1946, and is expected to grow by only 3.3% in 2023, according to the International Monetary Fund.
MTN, which operates in 21 countries across Africa and the Middle East, said it aims to conclude a deal for a minority stake in its fintech business with Mastercard by the fourth quarter of the year. It also said it is in the regulatory approval stages to exit Afghanistan and continues discussions to exit three of its smaller operations in Guinea-Bissau, Guinea and Liberia.
MTN managed to increase its service revenue in South Africa by 4.1% year-on-year in the third quarter to 31 billion rand. The company has 36.8 million customers in the country.
MTN’s resilience and innovation in the face of the power crisis show that the company is committed to providing quality services to its customers and contributing to the country’s development. The company also hopes its efforts will inspire other players in the sector and the government to work together to find lasting solutions to the energy challenge.
Source: Bloomberg
