MTN said it plans to invest between US$312 and US$367 million in its South African operation this year. While the figure might seem enormous, it is a substantial reduction from last year’s—down by US$225 million. This strategic retreat is MTN’s recalibrated approach to managing the fiercely competitive prepaid market.
In perspective, MTN’s continued investment in South Africa accounts for 19% of the group’s capex. By comparison, Vodacom has just revealed an ambitious capex program of US$603 million to US$613 million for the same market, greatly outpacing MTN’s effort.
Previously, MTN and Vodacom spent nearly US$548 million annually on their networks, with some years reaching over US$658 million. These investments are necessary to maintain high-quality mobile networks, ensure resilience during power outages, and roll out new technologies like 5G and cutting-edge data transmission technology.
But the dynamics are shifting. Although MTN currently holds the title of South Africa’s best mobile network, according to MyBroadband Insights’ 2024 Mobile Network Quality Report, the operator risks losing its edge if its reduced investments begin to affect network quality.
MTN Group President and CEO Ralph Mupita has assured stakeholders that the budget cuts will not compromise the network’s growth. He noted that MTN had already invested US$247 million in building network resilience and had sufficient capacity to continue operations.
On the prepaid front, MTN faced challenges in two provinces without Mupita specifying which ones. MTN South Africa CEO Charles Molapisi added that other regions saw good growth despite these challenges. He hoped the company’s reduced capex—about US$356 million—would still allow it to compete.
Despite regional challenges, MTN’s prepaid segment achieved a 5.5% customer increase by the end of 2024. Prepaid data usage surged by 9.5%, and postpaid data usage soared by 36.5%, driven largely by residential customers adopting fixed wireless access products.
MTN South Africa’s total revenue grew 1.5%, increasing to US$2,88 billion from US$2.84 billion in the previous year. Despite declining voice revenue, service revenue rose 3.1% to US$2,3 billion. Earnings before interest, tax, depreciation, and amortization (EBITDA) were 5.1% higher, reflecting a healthy financial performance despite the retrenchments.
Subscriber additions were another bright spot, with the company adding 2.4 million customers to reach 39.8 million subscribers at the end of 2024. Postpaid subscriptions, excluding telemetry, were up 6.1%, driven by increased uptake of combined voice and data plans.
In the future, MTN plans to double down on data services, focusing on 5G technology. The company is making its “home strategy” a priority to grow its base of home customers through fibre-to-the-home (FTTH) and fixed wireless access (FWA) solutions.
Enterprise services are also a key growth area, even though MTN anticipates some margin pressure as big contracts come up for renewal. Despite these short-term challenges, the company believes that enterprise revenue will increase, eventually underpinning margin recovery in the latter part of the year. As MTN South Africa navigates this change phase, it remains focused on constructing profitability, enhancing cash flow, and accelerating revenue growth—while remaining a leader in the South African mobile network sector.
