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MTN SA to spend R12bn to improve network

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 20 May 2016
This year was probably one of the toughest years for MTN, says CEO Mteto Nyati.
This year was probably one of the toughest years for MTN, says CEO Mteto Nyati.

MTN South Africa is investing heavily this year to turn around negative public perceptions towards the operator. This as intermittent network downtime has frustrated customers in recent months.

"This year was probably one of the toughest years for the MTN group, and not just for us but for everybody. All companies are going through challenges and everyone is scaling down in terms of capex. We have decided to do the opposite," MTN South Africa CEO Mteto Nyati told a press briefing in Johannesburg yesterday.

He said MTN SA will invest R12 billion in improving its network in the next financial year to improve voice, data and fixed broadband experience for customers.

"We have decided this is the time for us to continue to make investments. At a time when other people are cutting down, we are going to be making more investments."

MTN has upped its investment target by 50% since its full year financial results presentation in early March, when it said capital expenditure (capex) for the year would be close to R8 billion.

The target for this year is also an increase on the previous financial year's capex spend in SA of almost R11 billion.

"This is going to be a great opportunity for us as we emerge out of this downturn. The people that have made the investments are going to be the ones that lead. So we have taken the hard decision to increase the capex from last year," said Nyati.

Keeping customers

The investment increase is part of MTN's plans to deliver a consistent quality of service on its network. This as the telecoms giant works hard to improve customer experience in SA after a few technical snags over the past few months.

In February, one million voice, SMS and data customers throughout SA were affected for several days by sustained network downtime. Earlier this month, the network once again experienced issues when customers complained they were affected by data connectivity issues.

MTN SA plans the digitisation of its stores.
MTN SA plans the digitisation of its stores.

MTN SA acting chief technology officer Krishna Chetty told journalists at the media event that the operator has big plans to improve the quality of voice calls, augment data throughput and ensure network availability around the clock.

Chetty admitted he and the other execs are not proud of the issues the company has had on the network in recent months.

"We have swallowed that rather bitter pill, but we have come out understanding what we need to do to ensure we have a much more robust network that has the capacity to protect itself from some of the issues we have experienced recently.

"In the future, we expect less, if not none of these issues."

Chetty said it is important to improve consumer perceptions about network experience to keep customers and increase revenue.

MTN has set itself a target of decreasing the number of dropped calls on its network by up to half before the end of this year. In addition, MTN has pledged to increase peak user speeds by up to 28% for 3G, and 108% on the LTE network.

Nyati says MTN has prioritised transforming customer experience as one of the key differentiators that will set it apart from the competition.

This includes the digitisation of MTN stores, which Nyati says includes the launch of flagship stores which "will create a more digitised customer experience that will keep MTN customers more inspired to engage with MTN product offerings".

It will open a flagship 'paperless' store at the Mall of Africa in Midrand.

The telco has made changes to optimise customer billing, including improved communication of subscriber usage limits, and tools to view and proactively manage data spend. This includes the MTN app, which provides contract customers with real-time billing and spending control to counter any surprises on monthly bills.

Fibre push

MTN plans to ramp up its FTTx rollout - the generic term for fibre-to-the-home (FTTH) and fibre-to-the-business.

Alpheus Mangale, chief enterprise officer at MTN Business SA, says it's the company's aspiration "to take a leading position in FTTx in SA".

MTN Business has 14 000km of national and metro fibre across the country, which is a network connecting over 10 000 homes.

"We expect to connect between 18 000 to 20 000 homes and businesses by the end of 2016, with our fibre network," notes Mangale.

MTN's acquisition of Smart Villages will add more than 30 000 premises to the MTN Business network.

"MTN Business will continue to pursue aggressive acquisition of territory through building its own fibre, acquisitions and partnerships. We will also provide wholesale access to our active fibre network customers," he adds.

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