Giv­ing SA some love

Ditches Telkom and builds own net­work

Finweek English Edition - - Communication & Technology - BENE­DICT KELLY benk@fin­

WITH MTN’S RAPID ex­pan­sion over­seas it isn’t hard for its sub­scribers in South Africa to feel a bit like the ne­glected child. How­ever, the R7,1bn it’s set to spend over the next year or so in up­grad­ing its in­fra­struc­ture through­out SA should calm the most cyn­i­cal crit­i­cisms.

Speak­ing to jour­nal­ists last week, MTN SA MD Tim Lowry out­lined an ag­gres­sive plan to im­prove the qual­ity of its net­work and en­sure cus­tomer ser­vices are im­proved. In­dus­try pun­dits have seen SA as a sat­u­rated mar­ket but he says MTN is still see­ing strong move­ment from the pre-paid mar­ket into the post-paid (con­tract) mar­ket. “We ex­pect that mar­ket to con­tinue to grow at a sig­nif­i­cant rate for the next two to three years and there’s a lot to play for,” Lowry says.

To cope with that growth – in­clud­ing 100% year-on-year ex­pan­sion in the wire­less data mar­ket – it’s more than dou­bling its cap­i­tal ex­pen­di­ture from the R3,5bn al­lo­cated last year to R7,1bn al­lo­cated for this year.

Part of that ex­pen­di­ture is go­ing into a fi­bre ring in Gaut­eng that will re­duce its reliance on Telkom for con­nec­tions be­tween its base sta­tions and core net­work. Lowry says the de­ci­sion to go that route was driven by the long lead times for con­nec­tiv­ity from Telkom, plus the degra­da­tion of the ser­vice lev­els it had been re­ceiv­ing from the in­cum­bent op­er­a­tor. “Some 50% to 60% of our out­ages are di­rectly re­lated to down­time on the part of Telkom.”

It will also be lay­ing 5 000km of fi­bre to link SA’s var­i­ous ur­ban ar­eas. That will prob­a­bly be achieved in con­junc­tion with one other op­er­a­tor in or­der to keep the costs of the ex­er­cise down, al­though Lowry was un­will­ing to re­veal which com­pany would be its likely part­ner.

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