MTN Group CEO Ralph Mupita warned on Tuesday that the impact of US President Donald Trump’s tariff and trade war is likely to constrain capital spending by telecommunications operators due to increases in radio equipment costs.
Speaking at a media event at MTN’s Fairland, Johannesburg headquarters on Tuesday, Mupita said is too early to know just how impactful the tariff war will be on the global economy, with the world “a month or two away” from seeing the consequences “wash through the system”.
“Our anticipation is that global growth will slow and the tariffs, especially if they are sustained over a long period, will keep inflation more elevated than it would otherwise have been,” he said.
Inflation
“What we believe companies of our nature have to watch is supply chains and where the inputs from those supply chains come from,” said Mupita.
He added that inflationary effects are likely to ripple across the global economy and could lead to increases in the cost of radio equipment.
MTN has a set aside about US$2-billion for capital spending on network infrastructure in the 2025 financial year, which runs to 31 December.
Read: MTN to launch new pan-African streaming service
Mupita said the nature of capital expenditure means it requires planning, which includes knowing what equipment suppliers have and how much stock is available. This means MTN will be “largely shielded” from shocks to its supply chain this year as those deals are just about concluded.
Something else that may help shield MTN from the impact of the US tariffs is that the group acquires most of its radio equipment from Chinese vendors like Huawei Technologies due mainly to cost considerations.
Mupita explained that at $5/customer, MTN’s projected average revenue per user across Africa is much lower than the $60-plus that European operators can expect from their customers. As a result, MTN sources more of its kit from the more affordable Chinese vendors instead of others like Europe’s Ericsson.
MTN is of the view, which is shared by investment firm JPMorgan, that the risk the US economy will head into a recession has increased significantly as a result of Trump’s tariffs. How this will affect the global economy is something the group is watching closely, especially considering its expected turnaround in Nigeria.
Nigeria is MTN’s largest market, accounting for about 40% of the group’s revenues, with South Africa second at 30%. MTN’s outlook on Nigeria, which has suffered from severe inflation due to devaluation of the naira over the last two years, had been taking a turn for the positive. That recovery could be threatened.
Mupita said Nigeria’s dollar market – dollars are used to expatriate dividends out of Nigeria to MTN Group – has improved liquidity as a result of regulatory reforms and reserves built up by the central bank. — (c) 2025 NewsCentral Media
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