MTN Nigeria Earmarks N 240 Bn For Network Expansion In 2013

Renewed efforts to meet the quality of service mandates of the Nigerian Communications Commission (NCC) would see mobile network operator, MTN Nigeria spend $1.5 billion on network expansion initiatives in 2013.  
Wale Goodluck, corporate service executive, MTN made this known to journalists in Lagos, weekend. 

MTN Group, according to Goodluck in its latest financial results for the year ended 31 December 2012, has earmarked ZAR28 billion as capital expenditure (CAPEX) for network expansion across its 22 operations. 

“13 billion rands , that’s almost 50 percent is going to Nigeria - which is an indication of the importance of the Nigerian market.”

“In 2013, we are going to a lot more. On our 2G network which is for voice, we are putting in 5, 000 Base Transceiver Stations (BTS). 

For our 3G network, we are looking at something around 4, 000 base stations.” This investment, he went further is expected to bring succour in terms of improved quality of service. 

Commenting on the telecoms company’s ongoing network modernisation and optmisation project, the MTN CSE pointed out that 4, 615 telecoms sites have been upgraded out of 5, 528 sites. “Despite this massive investment in the network, the demand for voice services is still way ahead”, Goodluck posited. MTN currently has over 9, 000 BTS in the country.

He said the network modernisation project was slowed down by the recent flooding and raft of bomb attacks on telecommunications installations and equipment in the northern part of the country.  

Aggressive price competition driven specifically by bonuses on recharge, freebies and other promotional activities has seen MTN’s Nigerian operations negatively impact the Group’s overall margin performance, according to the company’s financial results for the year ended 31 December 2012. 

The EBITDA margin, according to the report declined by 3.4 percentage points to 58,3 percent, mainly because of flat revenue and higher operating costs.

Another critical factor responsible for poor performance recorded in the Nigerian operations,  according to the telecoms firm was the rise  in interconnect costs, driven essentially by an increase in off-network traffic. 

The company further added that it has enjoyed an improvement in the fourth quarter, which it expects to continue during 2013. For years,  MTN Nigeria have contributed positively from a revenue perspective to the group’s overall financial performance. 

“The fundamentals remains very strong. “Year-on-year, we have witnessed 30 percent decrease in tariff. In the second and third quarter, there was a lot of exuberance and aggressive competition in the industry which led to us giving away a lot of free minutes.

It has taking a lot of value from the business”, Wale Goodluck, corporate services executive, MTN Nigeria told BusinessDay on Wednesday. 

Data revenue (excluding SMS) increased by 111,6 percent (247,8 percent) in naira supported by the availability of affordable data-enabled devices (both GPRS and 3G). 

During the year a total of 3,8 million smartphones and 201k dongles were active on the network. This was achieved through partnerships with independent device resellers, free SIM cards, and data bundle offers, as well as the refitting of service centres to make them device oriented.

MTN Nigeria also saw strong growth in Blackberry subscriber revenues.

During 2012, MTN Nigeria rolled out 1 414 2G sites and 1 175 3G co-located sites and successfully implemented a large network swap and modernisation programme. 

South Africa’s MTN group recorded a 15.1 percent increase in subscriber number to 189.3 million, according to the latest results. 

This figure, according to industry analysts represent a strong result in the face of the ongoing subscriber registration requirements and network challenges in key markets.
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