Lesley Stones
3 November 2008
Johannesburg — CELLULAR operator MTN has improved its coverage in Nigeria so much that the industry regulator has lifted a ban on advertising its services.
The Nigerian authorities had fined MTN $20m and banned it from advertising to stop it trying to sign up more customers on a network that was bursting at the seams.
That spurred the company to install an extra 524 base stations in the past quarter.
MTN committed itself to capital spending of up to R30,5bn this year because its networks in Nigeria, SA and Ghana were not meeting standards. Of that, R7bn was earmarked for improvements in SA and R13bn for Nigeria.
Overall, the capex investment will double the R15,3bn, or 21% of its revenue, that it spent last year.
MTN issued fresh subscriber numbers on Friday for the September quarter, showing that it now serves 80,7-million users. That was up 9% from 74-million in the previous quarter.
Its voracious foreign expansion means south and east Africa now contribute just 28% to the group's user base, heavily overshadowed by west and central Africa with 44%.
Its newer operations in the Middle East and North Africa house 28% of its subscribers, but that region will become more important as its new network in Iran is poised for rapid growth.
The Iranian network now serves 13,1-million, and CEO Phuthuma Nhleko expects it to add 7-million new users for the year as it reaches further into the country.
Nhleko believes that Iran will generate as much traffic within two years as its network in SA achieved in 14 years.
Nigeria remains its largest operation with 20,1-million customers, which was up 9% despite the network congestion and the advertising ban.
The quality of service had improved significantly because of the concerted effort to roll out more infrastructure, the company said on Friday.
Its network in SA saw its numbers rise a modest 4% to 16173000 users.
That growth was largely created by its MTN Zone package, which offers variable discounts on voice calls depending on the time of day and location.
The average customer in SA now spends R147 a month, up 1% from the previous quarter, indicating that rising inflation has still not hit the amount they are willing to spend on telecommunications.
The Zone package has also been introduced in Uganda, Ghana, Cameroon and Benin, where it also helped the operations to boost their subscriber numbers.
Congestion in Ghana was eased with the roll out of another 377 base stations.
One country that performed less well was Syria, where a more modest increase of 2% was attributed to a slowdown in customer acquisitions during Ramadan.
MTN's share price increased 6,45% in active trade to R109 on Friday. Gryphon Asset Management analyst Jan Meintjies, told Reuters: "It's actually a little bit of good news"
He said the figures were better than he had expected.
Be the first to Write a Comment!
Copyright © 2008 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
