http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.54Change: 0.02
R/$ = 12.18Change: -0.02
Au 1173.82 $/ozChange: -0.69
Pt 1086.00 $/ozChange: 6.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Apr 04, 2008

MTN raises capex to R30bn to close capacity, quality gaps

Back
 
 
 
 
 
 
Africa|Cable|Ghana|Road|System|Africa|Ghana|Infrastructure|Cable|Operations
Africa|Cable|Ghana|Road|System|Africa|Ghana|Infrastructure|Cable|Operations
africa-company|cable|ghana-company|road|system|africa|ghana|infrastructure|cable-product|operations
© Reuse this



Following a solid set of results for the 2007 financial year, the MTN group board approved a capital expenditure (capex) of over R30-billion for 2008, as it hoped to boost infrastructure roll-out, which would go some way to alleviating network congestion, particularly in the South African and Nigerian markets.

The company noted the extensive increase in the traffic density in the telecommunications system and said it would enhance its already aggressive infrastructure roll-out, in order to ensure capacity and quality. MTN was confident that revenue would, accordingly, increase following the capex increase.

The rand:dollar exchange rate that the capex going forward was budgeted on was R7,22.

“We are dealing with a fairly significant growth in demand, and that demand is outstripping the capacity that we have, and because of that, we have resolved to make 2008 quite a very large capex year, to try to ensure that we fully exploit the demand and don’t find ourselves losing out on this growth,” stated MTN group president and CEO Phuthuma Nhleko.

“The two key operations to mention there are Nigeria and South Africa. I think that, if you look at the quality of the South African network at the moment, it’s not what it needs to be, and it’s not what it was. Obviously, there is also the infrastructure roll-out from the fibre perspective that comes through and then there’s also additional 3G capacity roll-out that comes through there,” reiterated MTN group financial director Rob Nisbet.

Commenting further on the South African market, Nhleko added that laying fibre cable was a key priority. He said that the company was planning on laying almost 5 000 km of cable by the end of 2008.

The roll-out of infrastructure also remained a key issue in Nigeria, as the group experienced “an explosion of subscribers” in 2007, but Nhleko stated that in the second half of 2007, MTN rolled out the most number of sites that it had ever rolled out in Nigeria, and expected to continue that pace in 2008. “We are going to put enough capex out there to cover that demand.”

MTN also started the roll-out of 3G in Nigeria on a pilot basis.

In 2007, MTN approved about R18-billion for capex, but it only spent about R15-billion, said Nisbet. However, considering exchange rates and the stronger rand in 2007, he added, “We probably put about R16,5-billion in the ground, and I think we said we would end up putting R17-billion in the ground – so we weren’t actually that far off from what we said we would put in the ground.”

Nhleko also indicated that he was aware of the scepticism with regard to the company’s ability to implement the roll-out and put that infrastructure into the ground in time, but was confident that the pace had increased, and noted the examples of Nigeria and Iran, as the latter currently had over 2 000 live sites.

“It was the first time that we went on a complete turnkey basis with three very big international vendors, and we believe that helped us a great deal with the coverage,” he said about the increased pace of roll-outs.

Huge infrastructure roll-outs were not only expected in Nigeria and South Africa, and the group stated that, in Ghana, it planned to lay 1 660 km of fibre in 2008, which would improve transmission capa-city, and increase the groups market share there.

Iran showed substantial growth over the period, and the group’s market share went from 12% in June 2007, to 25% by December 2007. By December 2008, the group expected the Iranian market to be the size of the South African market – which took 14 years to build. The infrastructure step change in network capacity in Iran included over 2 000 live sites, 1 500 km of road coverage, and the coverage of 339 cities.

Also in the Middle East, in Syria, the group enhanced the quality of its network in 2007, and rolled out 317 base stations, although the group has to use the regulator’s infrastructure in the country.

In Sudan, MTN experienced difficulties rolling out sites in southern Sudan, and rolled out less than 40 sites in Darfur, although the technical challenges from the first quarter were resolved.

Convergence also remained an important theme for the company, and although it’s ‘talks’ with Telkom “couldn’t proceed to a conclusive stage”, MTN had continued in other countries like Nigeria, Côte d’ Ivoire and Cameroon, to acquire ISP’s with a view of having a far more integrated solution and value proposition for its clients, particularly the corporate clients. “This will continue to be a big feature of 2008,” Nhleko said.

The company was in a mobile banking joint venture (JV) with Standard Bank, and a mobile television JV with Multichoice.

By the end of 2007, the group had increased its subscribers by 53% to 61,4-million subscribers. By the end of 2008, the company hoped to further increase the number of subscribers to over 80-million. It also hoped to significantly lower congestion levels.

Owing to the difficulties in being granted new licences, the group said that much of its expansion going forward was likely to be in the form of mergers and acquisitions.

Edited by: Martin Zhuwakinyu
Creamer Media Senior Deputy Editor
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Telecoms News
Strike action against South Africa’s second-biggest mobile network MTN has not ended yet, the company confirmed on Tuesday. Reports in weekend newspapers indicated that MTN and the Communication Workers Union (CWU) both compromised on demands to end a strike among...
The Competition Tribunal hearings into telecommunications giant Telkom’s buy-out of information and communication technology (ICT) firm Business Connexion (BCX) would convene from July 30 to August 7. This followed the Competition Commission’s approval of the...
As the Department of Telecommunications and Postal Services (DTPS) outlined its efforts to rationalise the State-owned companies (SOCs) that report to it, confusion had shrouded the deliberations of the governing parliamentary portfolio committee as there were more...
Article contains comments
Article contains comments
More
 
 
Latest News
Finance Minister Nhlanhla Nene
Updated 18 minutes ago The South Africa government confirmed on Wednesday that it had sold its 13.91% stake in telecoms group Vodacom to help finance the R23-billion injection into embattled State-owned electricity utility Eskom. The shares were sold to the Public Investment Corporation...
Updated 23 minutes ago This eight-page brief covers key developments in South Africa’s water sector over the past 12 months. It provides details of the state of South Africa’s water sector, planning and regulation, infrastructure, nonrevenue water and water-quality issues, as well as...
Gauteng Premier David Makhura recommitted the provincial government’s support to the revival of Gauteng’s manufacturing base, telling the second yearly Manufacturing Indaba on Tuesday that policymakers would drive legislation that created an environment in which the...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
JSE-listed Afrimat will make a cash offer to acquire the entire remaining issued share capital of subsidiary Infrasors that it does not already own.
TEAMWORK Aggreko Europe, Middle East & Africa MD David Taylor-Smith; Aggreko Zambia chairperson Dr. Sixtus Mulenga; Aggreko Africa MD James Shepherd
Temporary power generation services provider Aggreko announced earlier this month that it had appointed Dr Sixtus Mulenga as nonexecutive chairperson of Aggreko Zambia, a move it believed was integral to the ongoing expansion of its operations in Zambia and the rest...
Major global aircraft manufacturer Airbus Commercial Aircraft is maintaining a steady course. "I don't have any big news, good or bad," company President and CEO Fabrice Brégier told international aviation journalists in Toulouse, France, at the company’s recent...
MEASURING DEVICES Bosch has released a mobile app that enables the measurements made with measuring devices to be sent and used directly on the app for accuracy and on-site quoting
Industrial tool manufacturer Bosch has increased the compatibility of many batteries in its range of blue industrial power tools and has released mobile-device applications (apps) for users of the tools, says Bosch South Africa training manager Peter du Bruyn. Many...
The new Nissan Navara has been launched onto the global market, but Nissan South Africa (NSA) will only know in August whether the local Rosslyn plant will assemble the one-ton pickup. The NSA plant currently produces the old NP300 Hardbody one-ton bakkie, as well as...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96