MTN is looking into ways to trim its capital expenditure over the next few years.
The company, which has about 30 000 cellphone masts across the group, is pondering an agreement with a third-part tower-sharing company as a solution to trim its capital expenditure.
Last year, it spent R31.2 billion on its network across the group, which was a 10.6% increase on what it spent in 2008. MTN is Africa's largest cellular company.
However, MTN had budgeted R42 billion on capital expansion for last year. It saved R3.5 billion due to the stronger rand, and has rolled over R7.2 billion into this year.
MTN says 2009 was probably the year in which its capital spend would peak. The company has spent on improving its networks, including R10 billion in Nigeria, R2.6 billion in Ghana and R3.3 billion in Iran.
MTN could not provide additional clarity on what form a tower-sharing agreement would take, but it is anticipated that the company would sell off its towers to a third-party, and lease back space.
Cell C is rumoured to be entering a similar agreement in SA, although it would not confirm this. “Cell C is not in a position to comment at this stage. Should there be a development that we believe is in the public interest, we will issue a statement,” said CEO Lars Reichelt earlier this month.
Nhleko says, if MTN does enter into such an arrangement, it is likely to be company-wide. “We will try and apply it to ever single country,” he notes. However, some countries may have particular circumstances that prevent such an arrangement.
He adds that MTN does not have a time frame in which to implement a tower-sharing arrangement, but is thinking about the possibility. “We haven't made a call on this, but we need to rationalise our towers.”
Julia Lamberth, Ernst & Young telecoms sector leader, previously said tower-sharing is likely to grow on the continent. “Operators in Africa are likely to look at such deals; they are under cost and capex pressures.”
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