MTN, which this year celebrates its 20th anniversary, expects to trim its capital spending this year to R26.2 billion, a significant drop on what it spent last year and also less than 2012's R28.8 billion investment.
The group indicated in its results presentation for the 2013 year that it invested more than it expected in 2013, pumping R30.2 billion into the ground as capital spending increased 4.6%.
CEO Sifiso Dabengwa explains the projected lower investment comes as capacity on the network has improved.
Dabengwa says the group saw 2013 as a catch-up year in terms of infrastructure investment and is "now in a good position". He explains the group is happy with 15% "headroom" on its networks across its 22 countries of operation, which allows it to expand its subscriber base, and congestion is never more than a percent.
Excluding the effect of changes in foreign exchange movements, capital spending decreased 4.3%. "The large investment in capex during the year has significantly addressed both network quality and capacity, which will be key factors supporting continued growth over the medium-term."
Nigeria focus
During the 2013 year to December, MTN rolled out 5 161 2G and 4 413 3G sites across all its operations. It says this supports increased minutes of use and faster data speeds on its data network.
MTN grew its subscriber base 9.8%, to 207.8 million, and expects it to gain another 16.7 million users in the current financial year. It says its 2013 investment significantly improved network quality and capacity, and facilitated higher voice and data traffic.
"This investment in capacity will also ensure MTN remains competitive and is able to rollout solutions beyond traditional voice services."
MTN's planned capital spending will mostly go into Nigeria, where it will invest just short of R11 billion. It and other operators have come under fire from the Nigerian regulator for failing to meet what MTN calls unrealistic performance indicators.
Last year, MTN spent R14.3 billion in Nigeria, its largest operation, as it established 2 743 new 2G sites and 1 607 co-located 3G sites.
MTN Irancell invested R1.8 billion to rollout 746 new 2G sites and 415km of fibre, "improving the quality and capacity of the network", says MTN. The Iranian operation is battling to expatriate cash, and capital spending for 2014 has not been specified in its guidance.
In SA, its third-largest operation, MTN will see spending of around R6.3 million, an increase on the R5.8 billion spent last year. In 2013, the investment was focused on "improving quality and capacity on 2G and 3G networks", says MTN.
"During the year, we added 516 new 2G sites and 1 133 co-located 3G sites. The 3G population coverage improved sharply and is now at 75.8%."
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