MTN earmarks $1.5bn fornetwork expansion in 2013

by | March 12, 2013 12:50 pm



Renewed efforts to meet the quality of service mandates of the Nigerian Communications Commission (NCC) would see mobile network opera­tor, MTN Nigeria spend $1.5 billion on network expan­sion initiatives in 2013. Wale Goodluck, corporate service executive, MTN made this known to journalists in La­gos, weekend. MTN Group, according to Goodluck in its latest financial results for the year ended 31 December 2012, has earmarked ZAR28 billion as capital expenditure (CAPEX) for network expan­sion across its 22 operations. “13 billion rands , that’s al­most 50 percent is going to Nigeria – which is an indica­tion of the importance of the Nigerian market.”

“In 2013, we are going to a lot more. On our 2G net­work which is for voice, we are putting in 5, 000 Base Transceiver Stations (BTS). For our 3G network, we are looking at something around 4, 000 base stations.” This in­vestment, he went further is expected to bring succour in terms of improved quality of service. Commenting on the telecoms company’s ongo­ing network modernisation and optmisation project, the MTN CSE pointed out that 4, 615 telecoms sites have been upgraded out of 5, 528 sites. “Despite this massive investment in the network, the demand for voice services is still way ahead”, Goodluck posited. MTN currently has over 9, 000 BTS in the country.

He said the network mod­ernisation project was slowed down by the recent flooding and raft of bomb attacks on telecommunications instal­lations and equipment in the northern part of the country. Aggressive price competi­tion driven specifically by bonuses on recharge, freebies and other promotional activi­ties has seen MTN’s Nigerian operations negatively impact the Group’s overall margin performance, according to the company’s financial results for the year ended 31 December 2012. The EBITDA margin, ac­cording to the report declined by 3.4 percentage points to 58,3 percent, mainly because of flat revenue and higher operating costs.

Another critical factor re­sponsible for poor perfor­mance recorded in the Nige­rian operations, according to the telecoms firm was the rise in interconnect costs, driven essentially by an increase in off-network traffic. The com­pany further added that it has enjoyed an improvement in the fourth quarter, which it ex­pects to continue during 2013. For years, MTN Nigeria have contributed positively from a revenue perspective to the group’s overall financial per­formance. “The fundamentals remains very strong. “Year-on-year, we have witnessed 30 percent decrease in tariff. In the second and third quarter, there was a lot of exuberance and aggressive competition in the industry which led to us giving away a lot of free minutes.

It has taking a lot of val­ue from the business”, Wale Goodluck, corporate services executive, MTN Nigeria told BusinessDay on Wednesday. Data revenue (excluding SMS) increased by 111,6 percent (247,8 percent) in naira sup­ported by the availability of af­fordable data-enabled devices (both GPRS and 3G). During the year a total of 3,8 mil­lion smartphones and 201k dongles were active on the network. This was achieved through partnerships with independent device resell­ers, free SIM cards, and data bundle offers, as well as the refitting of service centres to make them device oriented.

MTN Nigeria also saw strong growth in Blackberry subscriber revenues.

During 2012, MTN Nigeria rolled out 1 414 2G sites and 1 175 3G co-located sites and successfully implemented a large network swap and modernisation programme. South Africa’s MTN group recorded a 15.1 percent in­crease in subscriber number to 189.3 million, according to the latest results. This figure, according to industry analysts represent a strong result in the face of the ongoing subscriber registration requirements and network challenges in key markets.

Stories by BEN UZOR JR