JSE-listed MTN, one of Africa's largest cellular operations, plans to spend another R28.2 billion on network infrastructure across the bulk of its operations this year as it positions itself for the future.
MTN this morning released its results for the year to December and said revenue gained 10.9%, to R135.1 billion, while its subscriber base grew 15.1%, to 189.3 million. During 2012, it spent a total of R30 billion on its network, compared with the original budget of R24.4 billion.
The bulk - at R13.7 billion - went into its Nigerian operations where it has come under fire from the Nigerian Communications Commission for not meeting quality of service targets. Nigeria is MTN's largest operation with 47.4 million subscribers of MTN's total base of 189.3 million.
In the current financial year, the group intends again investing heavily in Nigeria and has approved an amount of R13.1 billion. It ended the year with 10 450km of fibre in operation and added 1 414 2G and 1 175 3G sites, the most number of towers within a single year in the country.
MTN expects to meet the Nigerian Communications Commission's quality deadline by mid-year and says quality improvements were evident in the fourth quarter of the year.
Holding back
CEO and president Sifiso Dabengwa says the investment in its network will better position MTN to meet traffic demands and aid it in being more competitive. He says margins came under pressure as a result of competition, although this improved in the second half as the group became more competitive.
Dabengwa says, outside of SA, the group is not rolling out long-term evolution (LTE) currently, although it is set to trial it in Uganda and has linked base stations with fibre in Nigeria and Ghana in preparation. In SA, 8 000 physical sites require conversion in total, with plans to turn on LTE at around 1 000 sites each year depending on uptake and devices, says MTN SA MD Karel Pienaar.
South Africa, its third-largest operation, will see investment of R5.7 billion, slightly lower than the R6.4 billion that went into the network last year. MTN South Africa currently has 24.3 million subscribers and a market share of 37.7%.
During the year, MTN added 3.4 million net subscribers, the bulk of which were prepaid. Data revenue increased 33%, while data traffic grew 170.6%.
MTN added 300 2G and 1 087 3G sites and also has 281 LTE base stations live. It has also completed 1 300 fibre-to-the-site installations and has 8 815km of fibre in operation. Capital expenditure as a percentage of R41.4 billion revenue was 15.5%, up from 10.5% in 2011.
Ghana and Iran will have just more than R1 billion each invested in the networks.
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