MTN CEO, Ralph Mupita Warns that Tariffs Imposed by Donald Trump could Affect Telecom Services in Africa

MTN Group CEO, Ralph Mupita has warned that the United States Trump’s tariff policies could affect telecoms services in Africa. Mupita said recently at a presentation that costs of telecom services can go up as a result of these tariffs which target imported technology like radio equipment.

The rise in costs could compel operators in Africa to make changes to their spending plans, which could impede the expansion of mobile networks and delay the arrival of new technologies such as 5G. The Trump administration’s trade policies have centred on applying tariffs to countries like China, which is a major global supplier of telecom equipment.

Read Next: Pascal Dozie, Founder of Diamond Bank and First Chairman of MTN Nigeria, Passes Away at 85

According to Mupita, these tariffs may cause further supply chain disruptions and increase costs for key telecom service components in Africa. He said that if these tariffs persist further, it could increase inflation and make the critical equipment costlier which would further strain on operators whose budgets are already tight.

MTN Group, which operates in 19 African and Middle Eastern countries, spends about $2 billion each year on network infrastructure to improve connectivity and keep pace with rising demand for data. Mupita said that if the tariffs remain to be imposed, the company may face problems due to equipment pricing. MTN has secured its supply chain for this year but is uncertain about the long term.

One way MTN is trying to counter the impact of rising costs is by relying on Chinese vendors such as Huawei Technologies for cheap radio equipment. This strategy has enabled MTN to achieve cost effectiveness, considering that the low average revenue per user (ARPU) in Africa is lower than in Europe. Even though this gives them an edge, the U.S.-China trade war complicates things and splits the tech world into different supply chains.

Mupita stated that MTN is not on any side of this fence, adding that they are selecting components that suit their network specifications. He also said that long-lasting tariffs could eat into the cost benefits of using Chinese equipment, forcing operators to take a hard decision and either eat the extra cost or pass it on to consumers.

This issue is especially acute in Africa, where the situation on the ground is volatile, and average revenue per user (ARPU) is low enough that pricing flexibility has already been severely limited. The wider Africa telecom sector is likewise preparing for outages as a result of Trump’s tariffs.

Experts warned that, as the cost of equipment increases, so will the mobile internet expansion difficulties throughout the continent. This will stand to thwart efforts to close Africa’s digital divide and promote economic growth through greater connectivity.

Read Next: Instagram Tests ‘Locked Posts’ Feature to Enhance Creator Monetization and User Engagement

MTN is warning as part of its “Ambition 2025” strategy, which aims to diversify the company into a technology platform overall, via investments in fintech, digital and infrastructure. MTN is fully committed to expanding its networks and improving telecom services in Africa. However, it could be severely tested by things beyond its control like tariffs.

As inflation rises, currencies are unstable, and regulations change, African telecom operators should be careful, business analyst Ralph Mupita said in a statement. Effects of Trump’s tariffs on telecom services in Africa might not yet be obvious, but operators like MTN say they are bracing themselves for the worst.

Was this information useful? Drop a nice comment below. You can also check out other useful contents by following us on X/Twitter @siliconafritech, Instagram @Siliconafricatech, or Facebook @SiliconAfrica.