MTN

MTN South Africa CEO promise price hikes soon. Image: Twitter/@MTNZA

MTN users must tighten themselves for prices hikes soon

MTN South Africa CEO Charles Molapisi throws a sucker punch at MTN users after he made a promise that prices will definitely increase soon.

MTN

MTN South Africa CEO promise price hikes soon. Image: Twitter/@MTNZA

Just when consumers are dealt with a huge blow with the recent repo rate basis points increase, MTN promises to increase their prices soon.

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MTN planning to increase prices

MTN South Africa CEO Charles Molapisi has assured shareholders that the company could continue implementing inflationary price increases to grow revenue.

Molapisi mentioned the price increases during his presentation on the second day of MTN’s Capital Markets Day event on 1 June 2023.

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His assurances to shareholders that they could continue increasing prices directly contradict South African mobile network operators’ public promises.

As part of their campaign to convince the government and industry regulator Icasa to release precious radio frequency spectrum, Vodacom and MTN promised for years that the extra network capacity would let them cut prices.

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The launch of Spectrum

Spectrum is the raw wireless network capacity operators like MTN and Vodacom need for their towers to communicate with mobile devices.

After numerous delays, Icasa auctioned off a swath of sought-after spectrum in March last year.

Following the auction, all talk of the price cuts this precious resource would unlock stopped.

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The responses are courtesy of a Q&A interview that was conducted by MyBroadband.

 When MTN was asked how it would justify further price increases to consumers, the regulator, and government, this is their response:

  1. Firstly, some of the data price cuts may have been front-loaded as part of a settlement agreement between Vodacom, MTN, and the Competition Commission.
  2. In response to questions, Molapisi said this rapid degradation in South Africa’s power supply caught them off-guard.
  3. As a result of Eskom’s decline, South Africa’s telecommunications networks have had to invest heavily in backup power.
  4. MTN has said load-shedding cost its South African business R695 million in earnings last year.
  5. The effects of Covid–19 and load-shedding — including weak economic growth, a weak rand, and high interest rates — could explain the need to increase prices.

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