How much load-shedding cost MTN

Telecoms operator MTN has estimated that load-shedding cost its South African business R695 million last year.

In the MTN Group annual results for 2022, South Africa’s second-biggest mobile network said that operating conditions were significantly impacted by national grid power availability worsening in the second half of the year.

“We estimate that the overall effect of load-shedding on topline and costs resulted in a negative impact of R695 million (or 3.4%) on MTN South Africa’s EBITDA [earnings before interest, tax, deductions and amortisation],” MTN said.

The company said it continued to implement a “comprehensive network resilience plan” to mitigate the impact of load-shedding.

“Our investment in this regard, which included dealing with vandalism and additional security on sites, put additional pressure on operating costs,” it stated.

The company first began rolling out its resilience plan in the second half of 2022 and is targeting completion by May 2023.

Its South African business racked up R15.39 billion in capital expenditure in 2022, which included its investments in tower infrastructure like backup batteries.

MTN has estimated it will spend another R13.24 billion on capex in the country in 2023.

That will include the rollout of additional batteries, generators and “enhanced security features” to address an anticipated increased prevalence in load-shedding above stage 4 in the medium term.

“Load-shedding is anticipated to occur more frequently and with greater intensity, which has implications for MTN SA’s outlook for both service revenue and costs,” the company stated.

Despite the severe load-shedding, MTN South Africa grew service revenue by 3.6% during the year, while data revenue increased by 13.1%.

EBITDA also increased by 4.7%, or 2.8% when excluding the gain due to the sale of MTN towers.

MTN Battery storehouse 1
Rampant theft has forced MTN and other mobile networks to employ drastic measures to protect their expensive backup power investments, including embedding tower batteries in concrete.

MTN is not alone in its struggle with load-shedding, with Vodacom, Telkom, and Cell C also acknowledging its impact.

Vodacom has said it spent at least a billion rand on load-shedding backup batteries every year.

Analytico’s most recent analysis of South African neighbourhoods with the fastest m0bile data speeds showed a worrying trend about the impact of load-shedding in 2023.

Several of the top-performing neighbourhoods previously recorded average download speeds over 100Mbps, as recently as in the second quarter of 2022.

In that instance, the top three neighbourhoods recorded respective download speed averages of 128.46Mbps, 110.95Mbps, and 109.99Mbps. Two more also had speeds above 100Mbps.

The fastest average achieved in the year to date was 93.2Mbps, while the second and third-best were 76.27Mbps and 72.86Mbps.

There has not been a day without load-shedding since the start of the year, which supports the conclusion that the degraded performance might be due to load-shedding.

Wireless Access Provider Association executive committee member Paul Colmer recently also said that load-shedding’s impact was particularly bad on 5G, as the technology consumed more power.

Colmer said that mobile operators were being forced to recalculate the costs of their next-generation network rollouts due to the additional backup expenditure.

“There are many smart people that for years have been working on the strategy of rolling out national 5G networks,” Colmer stated.

“Almost overnight, all those calculations are invalidated because they never took into account that we’d have power issues like this.”

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