MTN Plans to Hike Call and Data Rates Amid Huge Profits

Patrick OdeyMay 21, 2023

2 minutes read

Telecom group, MTN, has announced that it intends to increase prices in selected markets due to the high inflation in the operating environment. This was revealed in its first quarter report filed on the Johannesburg Stock Exchange.

The MTN group, which operates across 19 countries including South Africa, Nigeria, and Ghana, said the average inflation across its footprint was 18.5 per cent in Q1 2023, compared to 11.5 per cent in Q1 2022. It claimed that higher inflation and interest rates affected consumers’ spending power and business activity.

The group stated that “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.”

The planned price hike by MTN has sparked outrage among its subscribers in Nigeria, who are already groaning under the high cost of telecommunications services in the country.

Many subscribers lamented that they spend more on calls and data than before, and that they have to cut down on their online activities due to the exorbitant charges.

Some subscribers also accused MTN of extorting them for calls and data after making billions of profits yearly.

According to its latest financial report, MTN Nigeria recorded a profit after tax of N298.7 billion in 2022, up 45.5 per cent from N205.2 billion in 2021

The telecom company also reported a service revenue of N1.7 trillion in 2022, up 23.3 per cent from N1.4 trillion in 2021

MTN Nigeria’s CEO, Karl Toriola, attributed the strong financial performance to the company’s commercial momentum and operational execution.

He said: “2022 was a significant year for our Company. We commemorated our 20th anniversary with a celebration of our customers and all the stakeholder relationships that enabled our journey. In addition, we made good progress towards our Ambition 2025 objectives, demonstrating the strength and resilience of the business.”

However, some telecom experts have argued that MTN’s plan to increase prices is unjustified and insensitive to the plight of Nigerian consumers.

They said that the Nigerian Communications Commission (NCC), the industry regulator, has been proactive in protecting the consumers’ interests and ensuring affordable telecommunications services in the country.

They cited various regulatory frameworks and initiatives by the NCC, such as data rollover direction, forced migration and auto-renewal direction, year of telecoms consumer campaign, right of way intervention, multiple taxation resolution, and critical telecoms infrastructure protection.

They also urged MTN to consider other factors that affect its operational costs, such as multiple taxations, diesel price hike, foreign exchange scarcity, power outages, and vandalism.

They advised MTN to engage constructively with the government and the regulator to address these challenges rather than passing the burden to the consumers.