MTN South Africa yesterday announced price increases for postpaid contracts (https://mtn.io/2024priceincrease) that would take effect from February 1, 2024, as the telecoms giant forks out billions of rands to improve its network resilience amid a power crisis in South Africa, and rampant crime.
“The price increases come at a time when the company continues to invest in network resilience to ensure that customers enjoy a high-quality network experience, despite continued national power cuts, ongoing crime at sites and a weaker rand against the dollar,” the telecoms giant said.
Eskom implemented load shedding on 183 days for 3 578 hours, which equates to 149.1 days, the power utility said in its interim results this week.
MTN said the adjustment encompassed an average increase of 4.3% on customers’ total monthly bills, which include elements such as insurance, device fees, out-of-bundle spend, itemised billing etc.
According to a Monetary Policy Committee statement of November 2023, the South African Reserve Bank forecasts headline inflation of 5.0% in 2024.
MTN SA chief consumer officer, Ernst Fonternel, said, “In recent years, demand for data services has grown exponentially, placing greater strain on telecoms networks. At the same time as investing to improve our extensive network infrastructure, we have had to contend with the escalating costs of ensuring resilience during load shedding, inflationary pressure and more instances of battery theft and site vandalism.”
“The price adjustment will enable us to enhance our network resilience to ensure that our customers experience improved network stability and reliability.”
Out-of-bundle voice rates will increase by R0.11 on average, while out-of-bundle data rates increase by only R0.04 per MB. Subscription fees will increase by an average of 8.8%. Device fees, insurance premiums, and add-on voice/data bundle prices will remain unchanged.
The company said that since the end of 2022, it had been running an intensive network resilience programme to enhance and strengthen its network, particularly to counter the effects of consistent power cuts, along with theft from network sites.
By the end of quarter one 2024, MTN will have invested R4 billion to R5bn in the network to ensure best-in-class service.
“This significant investment is evidenced by MTN’s recognition by MyBroadband, when it declared MTN the Best Mobile Voice operator in 2023. MTN’s excellence was determined through SA’s largest-ever network quality testing, across the country and involving a number of independent partners,” it said.
MTN said it had consistently applied only inflation-related increases over the years. Increments include a 4% rise in 2019, 5% in 2022 and 5.1% in 2023, with a notable hiatus in 2020 and 2021.
“However, faced with current economic pressures, MTN is adopting a cautious approach for 2024 to ensure it can continue to deliver a quality network experience to customers,” it said.
MTN acknowledged the potential impact of the price adjustments on contract customers.
“We remain committed to delivering exceptional value and service while navigating the economic realities impacting the industry, and the country. In addition to the network enhancements, we will continue to offer a wide range of innovative products and services, ensuring customers receive the best possible experience,” it said.
MTN said the price increase for postpaid contracts would be implemented in a fair and transparent manner.
It encouraged customers to explore the various contract options available and to engage with its customer service representatives to find the most suitable plan for their needs.
Two months ago MTN reported that it had achieved a 15% improvement in network availability in the face of load shedding and vandalism, after it invested R4.5 billion to R5bn in its network to keep customers connected.
At the time the company said, it had achieved significant milestones including the deployment of more than 20 000 batteries, 5 000 rectifiers, and nearly 900 generators to sites across the country.
“All this has been achieved amidst the ongoing load shedding crisis exacerbating theft and vandalism issues which continue to plague not only MTN but all South Africans.”