In response to the persistent Eskom blackouts and South Africa's ongoing energy crisis, telecom giant MTN plans to invest R10 billion in 2023 and early 2024. This substantial investment aims to strengthen its network's resilience amidst the country's power challenges. This move comes on the heels of an R6.6-billion investment initiative that was designed to improve network robustness.
Despite facing stiff market competition from industry leader Vodacom, MTN is prioritizing uninterrupted connectivity and network stability over profit margins. The company has already invested billions into this project within the first three quarters of 2023, with an additional R2.5 billion earmarked for the upcoming months.
Telecom providers like MTN are resorting to alternative power sources such as solar energy, generators, and lithium batteries to keep their cellphone towers operational during blackouts. Over 16 years of energy insecurity in South Africa has necessitated substantial investments in these backup power systems for telecom towers.
On Tuesday, MTN confirmed that these investments were yielding positive results, with improvements noted in network reliability for customers in South Africa. The company targets an average network availability rate of 99.7%, a measure of reliability against disruptions including blackouts.
However, these investments have not been without impact on the company's earnings. MTN's EBITDA margin at its South African operation fell from 39.5% to 36.4% within the first nine months of the year due to increased expenditure on backup power measures. Despite this, MTN's investment has led to an improved network experience, resulting in a 2.6% increase in subscriber numbers to 36.8 million, primarily from post-paid subscribers.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.