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MTN plans R24bn capex
Tuesday, 20 March 2012 00:00
Written by Nicola Mawson
Africa’s largest cellular operator, MTN, will spend about R24.4 billion on its network over the next year.
The biggest slice of the investment, at R10.5 billion, will be go into improving its Nigerian network, which had experienced issues with capacity after MTN cut prices to respond to the competitive market.
Nigeria is MTN’s largest operation, with more than 41 million subscribers – almost double that of its South African entity. It is also the single largest GSM cellular company in Nigeria.
MTN CEO and president Sifiso Dabengwa says the operator has set aside a total of R13.6 billion over the next year-and-a-half to make sure the Nigerian operation meets the challenge of improving service levels. The company’s Nigerian operation had come under fire from the local regulator for not meeting minimum quality of service standards.
Dabengwa explains the Nigerian network was challenged, because tariffs dropped faster than expected, leading to traffic levels that the company only expected to see this year. MTN Nigeria saw subscribers increase 7.7% to 41.6 million and total revenue-generating minutes gained 31.5%.
MTN also plans to spend R4.6 billion in SA, and another R1.1 billion in Ghana, where it has sold 1 865 towers, limiting capital spending requirements.
The operator will spend R869 million in Syria, where it is experiencing difficulty operating due to political unrest. Its remaining operations will see R6 billion invested in the network.
During 2011, MTN had expected to invest a total of R22 billion, but only spent R17.7 billion. Dabengwa says 95% of the authorised amount has been committed and the balance will flow through in the first half of this year.
MTN recently released its results for the year to December and said group subscribers gained 16.2%, to 164.5 million. Revenue in constant currency grew 9.7%, to R121.9 billion.
Dabengwa says the operator had some challenges in receiving network equipment in countries such as Iran and Syria, where there is political unrest.
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