MTN cuts spending plan to preserve cash during virus pandemic

MTN reduced spending plans for the full year to focus on preserving cash and maintaining networks as Africa’s biggest wireless carrier by sales navigates the Covid-19 pandemic.

The Johannesburg-based company will invest R21 billion ($1.1 billion) to R22 billion in 2020, compared with an earlier guidance of R28.3 billion, it said in a statement on Thursday. The group stuck with a medium-term growth forecast and said it’s committed to an asset-disposal plan kicked off last year.

Telecom firms have been among the more resilient to the coronavirus crisis as governments order populations to work and entertain themselves at home to contain the pandemic. MTN reported data-traffic surges in three of its biggest markets, South Africa, Nigeria and Ghana, from the end of February.

MTN shares have slumped almost 40% this year, in part due to exposure to Nigeria, which is facing economic strife due to the combined impact of the coronavirus and slumping oil price. Crosstown rival Vodacom is up 13% over the same period.

MTN first-quarter sales increased by 11%, while the carrier added 6.6 million subscribers to reach 257.3 million. The company extended a license in Uganda, one of its 21 markets, to 2032 for about $100 million.

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