Infrastructure constraints will inhibit ability to meet demand – MTN

3rd October 2014

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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The cost of deploying network infrastructure and the long delays experienced in securing site permits could hamper telecommunications group MTN’s ability to satisfy the needs emerging from the “data tsunami” in South Africa, MTN chief technology officer Eben Albertyn said on Friday.

Presenting to a panel at the Independent Communication Authority of South Africa’s (Icasa’s) inquiry into the state of competition in the information and communication technology sector, he added that proponents would need to find a more efficient way of delivering the network services to the consumers benefit.

“Demand is outstripping supply,” he said on the third day of the hearing, which also saw Neotel, Telkom, Vodacom and Cell C provide their views.

“The demand curve is no longer at the bottom of the hockey stick,” Albertyn explained. “We are now seeing the nasty [rise] on the hockey stick.”

Demand was increasing so rapidly that spectral efficiency and networks could no longer cater for the demand, he noted, adding that billions of rands, innovation and scale were needed to deliver the required capacity.

This was in addition to the long lead times to secure approvals for infrastructure roll-out, access to spectrum, access to power infrastructure, capital expenditure (capex) and equipment theft and vandalism, which had become the dominant inhibiters to the roll-out of infrastructure and networks in South Africa.

“We are moving backward,” he warned.

The framework allowing operators to obtain permits to build infrastructure had not evolved at the same now-fast pace that operators could roll out the networks, owing to technology, Albertyn noted.


He pointed to the current 200- to 350-day delays in securing way leave approvals being directly responsible for MTN having great challenges in deploying its third-generation (3G) and fourth-generation services.

Neotel MD Sunil Joshi commented on Thursday that permit delays, red tape and resistance, owing to a lack of a rapid deployment policy, had led to a 20-month delay and added R100-million to its bill to complete its national fibre network build.

The implementation of “rapid deployment guidelines” would provide the regulatory platform to ensure infrastructure was adequately developed and leveraged across South Africa.

Further, MTN believed that network consolidation, infrastructure-sharing and joint ventures needed to accelerate to exploit economies of scale and synergies and ensure the required network infrastructure investment kept pace, and innovation continued.

MTN GM for regulatory affairs Graham de Vries said, with networks required to cater for an exponential growth in demand for broadband – with the price tag running into billions of rands to achieve this – consolidation would also emerge as a key enabler.

Many network operators were examining network sharing, partnerships and consolidation in some form or another to bring down costs and add scale.

“It does not make sense to roll out duplicate infrastructure,” De Vries pointed out, with Albertyn adding that the “efficient” point or balance of sharing and consolidation should be probed.

Deals were already under way, he noted, highlighting a site in Betty’s Bay, where all four mobile operators operated but only two base stations stood.

The merger of assets would release capex, increased efficiencies, expand coverage and boost consumer benefits.

MTN had injected more than R20-million into its own network over the past four years – a pace that would need to accelerate to ensure consumer demands were met.

The group planned to roll out 900 new 3G sites and complete 1 600 upgrades this year.

Over the past 20 years, MTN had established more than 9 000 locations or sites, with its 3G sites covering 85.12% of South Africa’s population, a 63% rise from 2007, with long-term evolution now covering 10%.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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