South Africa’s MTN Group Ltd (the parent company of MTN Nigeria) said it will cut down on spending plans for the year due to the economic uncertainties created by the Coronavirus pandemic.
In specific terms, the telecoms giant will only invest between R21 to R22 billion, as against an earlier plan to invest as much as R28.3 billion this year. According to Bloomberg, the telco is sticking to its medium-term growth forecast.
Meanwhile, in a statement released earlier today by MTN Group Ltd, the President and Chief Executive Officer, Rob Shuter was quoted to have said:
“The COVID-19 situation is an evolving one and will undoubtedly impact the year ahead. Given the uncertainties associated with the duration and economic impact of the pandemic, it is difficult to reliably quantify the direct and indirect financial impacts on the business at this early stage. The group will continue to focus on business continuity and efficiency, and we have implemented strict measures to preserve resources and strengthen our resilience.”
Interestingly, MTN’s decision to cut down on CAPEX is coming in the heels of an impressive Q1 result. The company’s revenue for the first quarter grew by 11%, even as 6.6 million new subscribers joined the network across the markets where MTN operates; including Nigeria. Similarly, MTN Group’s EBITDA for Q1 2020 “widened overall to 43%”.
In the meantime, telecoms operators like MTN have continued to benefit from the pandemic, thanks to increasing demand for data as more people resort to remote working, e-learning, and e-commerce. For MTN Group, data demands have been surging in Nigeria, Ghana, and South Africa since February ending.