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Data rush calls for huge investment

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 03 Oct 2014
Mobile data traffic in SA is expected to have a compound annual growth of 53% in the next five years, to reach an annual run rate of two exabytes by 2018, according to Cisco.
Mobile data traffic in SA is expected to have a compound annual growth of 53% in the next five years, to reach an annual run rate of two exabytes by 2018, according to Cisco.

In the last four financial years, MTN has invested over R20 billion in capital expenditure in its network and - given the "data tsunami" that is engulfing SA and the world at large - this is just the beginning.

This is according to GM of regulatory affairs at MTN, Graham de Vries, speaking at the Independent Communications Authority of SA's (ICASA's) hearings around the state of competition in the ICT sector today.

Eben Albertyn, MTN CTO, adds: "If the data tsunami continues at this rate, by 2020 I would have to build something like 65 000 towers per annum to meet the demand. That is not possible, so we are trying to find other ways of doing things, but the reality is that we are in a precarious space and are finding it extremely difficult."

One of the ways Albertyn cited was the lamppost project the operator recently undertook with City Power ? which has had a spanner thrown in the works by unhappy residents.

While MTN believes the mobile market is effectively competitive, it pointed out that large and increasing investments were needed to address consumers' burgeoning data demands - a reality that can more effectively be addressed if certain regulatory issues are tackled, spectrum allocation being at the top of the list.

"Customer demand is increasing all the time. By 2019, we expect there to be 65% population coverage in Sub-Saharan Africa, while data traffic will grow 17 times between 2013 and 2019. These are not insignificant amounts and we need to keep up," says De Vries.

"Video dominates data traffic, with over 65% of this being spun by services like YouTube, Facebook and Netflix. Users want to be connected to content and friends, everywhere, and they always expect perfect quality, zero latency, limitless speed and zero cost.

"Then the Internet of things means machine-to-machine communication will experience the biggest growth rate, with 50 billion connections by 2020," De Vries said, citing Cisco research.

The operator said it was continuously rolling out broadband coverage. MTN's population coverage statistic as at June 2014 for 3G is 85.12%. Since 2007, there has been about a 63% increase in 3G population coverage and MTN plans to roll out an additional 900 3G sites plus 1 600 upgrades in 2014.

"We will get there, eventually," said De Vries, but in order to be able to get there sooner rather than later, he said, certain key obstructions to broadband growth would have to be addressed.

"It is essential high-demand spectrum be assigned as soon as possible."

Other key obstructions the operator said needed to be taken into account were long lead times, access to power infrastructure, capital expenditure and equipment theft and vandalism.

Auction delay

ICASA councillor Katharina Pillay pointed out it was the operators that stopped ICASA's spectrum allocation move some three years ago. "We started the process of high-demand spectrum allocation and then the operators said, 'you cannot do that, you do not have a policy in place'."

Allocating more spectrum in the 2.6GHz and 3.5GHz ranges has been on the cards since 2006, but invitations to apply for frequency in the bands were withdrawn in June 2010. Since then, there has been little movement towards auctioning the spectrum.

Although then communications minister Dina Pule said she would provide ICASA with policy direction for the assignment of high-demand spectrum in May 2012, this did not come to pass, and has not featured on any of government's urgent agendas since.

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