MTN’s data prices too low in South Africa

MTN Group CEO Ralph Mupita has said that the price of data on their residential fixed wireless access 4G and 5G products in South Africa is too low.

Mupita was responding to media questions following the release of the company’s half-year financial results earlier this week.

MTN reported that South Africa’s data revenue only grew by 2.4% in the first half of the year despite active data subscribers increasing 10.5% and data traffic increasing 36.5%.

MyBroadband asked whether this would be the new trend — where a massive increase in data traffic would be needed to register a small increase in revenue.

Mupita explained that fixed wireless access (FWA) had been one of the big drivers of data traffic growth.

MTN SA’s results showed that data consumption among postpaid subscribers had increased 51% to 21.9 GB compared to last year, whereas prepaid data consumption increased 9.9% to 3.1 GB.

“Now that whole area, I keep saying to Charles [Molapisi] (MTN SA CEO), we need to manage demand for data,” he said.

“Particularly in Supersonic where there’s an enormous demand for data. People binging on games and so forth. That area requires a proper pricing framework.”

Mupita said that a lot of this consumption was happening on residential FWA products.

“There’s still some work to do there to manage and shape that traffic but also to get the pricing right,” he said.

Outside fixed wireless access, Mupita said MTN had already implemented pricing increases which should boost revenue in the second half of the year.

He also said that in South Africa, H1 was actually a “tale of two quarters”.

Revenue growth was muted during the first quarter due to load-shedding, and MTN’s postpaid price increase was only implemented in February.

Load-shedding was suspended in the second quarter, postpaid revenue grew on the back of the price increase, and Mupita said they were somewhat surprised by prepaid voice.

MTN SA implemented price increases on some prepaid bundles towards the end of the second quarter, which Mupita said will come through in their full-year results.

Mupita said the more muted prepaid growth during both quarters was one of the key issues affecting their overall data revenue growth.

“I think there’s still a bit of prepaid pressure. Prepaid data, we’re not quite where we want to be,” said Mupita said.

He said they implemented a round of prepaid bundle price increase in June, and another batch in July.

“I think probably into Q4 we’ll see the effects of those prepaid data price supplements we’ve brought to market,” Mupita said.

“Prepaid remains an area under pressure and we think performance should be better.”

MTN recently told MyBroadband that it has reached 44% population coverage for 5G.

That is a 19 percentage point increase from the 25% coverage it had last year.

It has also rolled out its entire target of 900 new 5G sites in 2024, with more than four months remaining in the year.

MyBroadband’s Speed Test results show the operator’s customers are currently achieving average download speeds of around 180Mbps and average uploads of 40Mbps on its 5G network, while latency is in the low 20ms range.

MTN has also made significant strides in improving its overall network reliability in 2024 in response to load-shedding.

Firstly, it concluded its national network resilience rollout in the first quarter, increasing its overall network availability to 98%.

This programme saw MTN pour tens of billions of rand into backup power at its towers and other key network sites, ensuring it could keep customers online for longer during load-shedding and other power outages.

In addition to 5G investments, MTN has modernised over 400 4G sites in the first half of the year, with another 25% of its 4G sites set to be upgraded in the last six months of 2024.

In total, the company has spent R5.6 billion on network expansions, upgrades and resilience in 2024.