Telecommunications giant MTN has nearly doubled its planned investment into South Africa over the next year, as it aims to support its growth plans, particularly around data, while playing catch up and gaining back lost subscribers.

The mobile operator, which rallied in the second half of the 2014 financial year, after having lost ground in a price war with competitors in recent years, was preparing to embark on a R10-billion capital expenditure (capex) programme in South Africa in 2015 to improve the quality and capacity of its second-generation (2G) and third-generation (3G) networks and to deploy long-term evolution (LTE) sites.

MTN group CEO and president Sifiso Dabengwa said the real focus was on South Africa, where significant traction during a turnaround saw MTN report 2.7-million net additions in the second half of 2014, after experiencing 430 496 net disconnections in the first half of the year, leading to a 8.9% rise in the company subscriber base to 28-million for the full year.

“[This offers] a good opportunity to ensure the turnaround we have seen delivers on the results we expected,” he said at a presentation of the company’s results on Wednesday, adding that MTN aimed to add 2.4-million new subscribers to its network this year.

“We are not falling backwards intentionally,” he said, promising that the company would remain competitive and close the gap from a coverage point of view.

MTN, which saw a contraction in its market share from 34.6% in 2013 to 33.9% in 2014, had spent capex of R5.7-billion in the year under review, adding 520 2G, 904 3G and 23 LTE sites to its portfolio.

During January and February, MTN added another 337 3G and 169 LTE sites and had upgraded 1 218 2G sites, to ensure capacity to meet the upward rise in voice and data traffic, which rose 31% and 52% year-on-year respectively in the year under review.

“The objective is to get data revenue beyond 25% within the next three to four years,” Dabengwa said. Data currently accounted for 23.8% of total revenue in South Africa and 21.8% groupwide.

MTN’s capex for the group for 2014 was 16.3% lower at R25.2-billion, with 3 669 2G and 6 491 largely colocated 3G sites, as well as 684 LTE sites rolled out across its operations.

In Nigeria, capex had been cut by 41.1% to R8.3-billion in the year under review, while the large opco cluster, which included Ghana, Cameroon, Uganda and Sudan, besides others, received 1% higher capex at R5.8-billion. The small opco cluster saw a 2.1% rise in capex to R3.8-billion.

For 2015, MTN would invest R29.6-billion in capex across all its operations.

FINANCIAL RESULTS
In the 12 months to December, MTN posted a 8.9% rise in basic headline earnings a share to 1 536c, while its attributable earnings a share increased by 20% to 1 752c.

Group earnings before interest, taxes, depreciation and amortisation (Ebitda) increased 10.2% to R65.5-billion, with the group’s Ebitda margin widening to 44.8%.

The group’s South African operations reported an 11.1% contraction in Ebitda to R12-billion, while Nigeria reported a 8.2% rise to R31.6-billion.

Despite a 3.9% contraction of South Africa-generated revenue to R38.9-billion, mostly owing to a 36% decline in interconnect revenue, group revenue increased by 6.4% to R146-billion.

All of the group’s operations, barring Ghana and South Africa, recorded an uptick in revenue in the year under review, with revenue from Nigeria reporting a 12.1% rise.

Group subscribers increased by 7.5% to 223.4-million.