MTN to Spend R7.1 Billion to Boost Network in South Africa

MTN is planning R7.1bn in capital expenditure this year, mainly on increasing its network capacity and coverage. The spending is roughly double the amount it invested in its South African operations last year. The plans centre on laying fibre optic cables in urban areas of Gauteng and laying another 5000km of lines to create a national backbone. That will end its reliance on leasing lines from Telkom for its network backbone. Its network can support 19.5-million active subscribers, and is already serving about 15-million users in SA. Cable-laying to boost capacity in Gauteng will begin in August and cost up to R150m, with an expectation of saving R2.8bn in running costs over a decade. No start date has been set for the national fibre optic roll-out. MTN South Africa MD Tim Lowry said it would lay the cables in conjunction with another operator to save them both money and minimise the disruption to traffic as roads are dug up. "We are building strong capacity, which will allow us to do multiple things in the future," Lowry said. The capacity needed to carry voice calls was very predictable, he said, but when data transmissions were involved far more capacity was needed. Chief technology officer Sameer Dave said MTN's priorities included boosting capacity in buildings such as shopping malls, airports and hotels and in reaching untapped rural areas. "Self-provisioning is one of our major objectives to wean us away from our reliance on Telkom," Dave said. "We are completely dependent on Telkom and we are not able to get links from them and the lines are going down every now and then. Almost 50% to 60% of our down time is related to Telkom issues," he said. MTN is also keen to boost its international backbone and is one of the main investors in the $235m EASSy undersea cable to be laid around Africa's east coast. Lowry said MTN was also involved in one of the private sector cables being planned to boost capacity around Africa's west coast. Lowry said MTN was signing up customers faster than a year ago, in a market that many thought was nearing saturation. "The market will continue to grow at a significant rate for another two years, with 9-million to 10-million additional customers that the networks can fight over," he said.