On Wednesday 15th of April, top executives at South Africa’s Mobile Telecommunications Network (MTN) Group pledged nearly a third of their salaries and fees for the next three months to finance a 40 million rand ($2.2 million) emergency fund for staff affected by the coronavirus (COVID-19) pandemic.
The donations by the telecoms group’s chairman, chief executive, chief financial officer and other directors are part of a broader 250-million-rand relief effort to tackle COVID-19 outbreak across its 21 markets.
MTN will also contribute 10 million rand to a support fund set up by the government and will invest 150 million in the Y’ello Hope Package for customers, including discounted off-peak calls, zero-rating of certain health, social services and educational sites, and payment concessions to business customers.
By doing so, MTN has joined other companies in the fight against COVID-19, by supporting COVID-19 relief efforts. On Sunday, top executives of Vodacom and Absa also announced plans of donating a third of their salaries for three months to the government fund, joining the heads of others including FirstRand and Nedbank in heeding requests for backing from President Cyril Ramaphosa.
However, South Africa’s economy went into recession in the final quarter of last year, even before the effects of the COVID-19 outbreak. This led to the country imposing some of Africa’s toughest restrictions, causing increased hardship for many citizens.
A number of companies have scrapped their financial guidance and either cancelling or suspending dividend payments but MTN said its medium-term guidance was intact for now.
Nevertheless, the telecoms industry has benefited from the lockdown of various countries, has experienced a spike in data traffic in recent weeks. Rob Shuter the Group President and Chief Executive of MTN, said that the company has seen a 30 percent increase in data traffic since March 27 compared with the previous month. Its data traffic has been generally growing between 40 percent and 60 percent a year across the portfolio.
To deal with the surge, MTN has applied to the telecoms regulator for more spectrum. “It will take us around four weeks to deploy the equipment that we’ll need to utilise these bands if they become available,” he said.
