JSE-listed MTN, Africa's largest cellular operator, will spend more than $1 billion in Nigeria this year after the local authority found it does not meet quality of standard service requirements.
The investment, about R8.16 billion, is in addition to the $1 billion outlay the company made last year in a bid to upgrade its network and roll out more base stations.
Reuters reports that the Nigerian unit will spend more than $1 billion this year as it looks to meet regulatory demands to improve service.
Nigeria is MTN's largest operation, with 41 million subscribers - almost double that of its South African entity. It is also the single largest GSM cellular company in Nigeria.
The wire service says the operator was reprimanded last year by the Nigerian Communications Commission for not meeting quality of service targets. MTN has said it would have to improve its service, or face financial penalties, says Reuters.
MTN Nigeria's corporate services executive Akinwale Goodluck says the company invested $1 billion in the country last year alone on network infrastructure deployment and optimisation.
“This investment led to a substantial expansion of [the] fibre, radio and core network with a view to meeting and exceeding the expectations of our over 40 million subscribers on the network.”
Goodluck says its major goal in 2012 is to achieve more growth “in our current infrastructure deployments”. Last year, the company expected to add a total of 3.2 million more subscribers to its network.
However, Goodluck did not confirm the amount to be invested, nor did he respond to questions around where the spending would be focused, or why it is necessary.
Rolling out
Since the operator launched in Nigeria about 10 years ago, it has spent around R50 billion on its infrastructure. However, its investment goes against the current trend of outsourcing infrastructure rather than investing directly, and is viewed as a bid to bolster its subscriber base in a market nearing maturity.
MTN owns 76% of MTN Nigeria. The balance of the operator is held by Nigerian partners (21%) and the World Bank's investment arm, the International Finance Corporation (3%).
The operator secured one of four licences to operate digital GSM services in February 2001 and launched full operations in 2001. By February 2003, it recorded a million active subscribers, the first operator in Nigeria to hit that milestone.
MTN's more than $7 billion investment has gone into facilities and fixed assets. Its coverage spans 2 394 cities, towns and villages in Nigeria's 36 states, covering 85% of Nigeria's about 160 million people.
MTN Nigeria has also constructed a digital microwave transmission backbone, Y'elloBahn^a, which has covered 11 500km. Its fibre backbone spans about 8 500km.
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