With pressure mounting on South African mobile operators to cut the costs of communication and improve the quality of their services, while also contributing to government plans to achieve universal mobile and internet access by 2020, HumanIPO spoke to the four mobile operators to find out how much they plan to spend on infrastructure upgrades over the next year, and what their investment priorities are.
Vodacom
Vodacom is the market leader in South Africa, holding 47 per cent of the market, while its 3G network offers 91.9 per cent population coverage.
HumanIPO reported on Monday Vodacom released its financial results for the year ended March 31, revealing the operator invested ZAR6.9 billion (US$665 million) in South Africa over the year, focusing on expanding network reach, as well as improving network capacity and resilience.
The operator told HumanIPO it will up investment levels over the coming year, with a view to improving network coverage and capacity.
“We intend to invest approximately ZAR9 billion (US$870 million) in our network in South Africa in the current financial year (runs from 1 April 2014 to 31 March 2015). That’s an increase of roughly 30 per cent on last year,” Richard Boorman, spokesperson for Vodacom, told HumanIPO.
“The key areas we’re investing in are new base stations, high-speed self-provided transmission (fibre and microwave), and our core network.”
MTN
South Africa’s second operator MTN holds 37 per cent of the market, and sees its 3G network span 75 per cent of the country’s population.
MTN claims to have spent 84 per cent of profits made in the last five years on infrastructure development – amounting to more than ZAR26 billion (US$2.4 billion).
The operator told HumanIPO it would put a further ZAR7 billion (US$677 million) into expanding its network over the coming year, and will also focus on rolling out fibre to the home services in certain areas.
“MTN South Africa’s expansion of the network seeks to ensure that MTN has adequate capacity to carry the growing traffic volumes especially as the company continues to introduce groundbreaking propositions for customers,” Eben Albertyn, chief technology officer (CTO) at MTN South Africa told HumanIPO.
“We have expanded our network capacity and capability by rolling out and investing in infrastructure to ensure a great customer experience. Our investment is geared towards building more 2G/3G and LTE sites and enabling a scalable, future proof IP transmission network,” Albertyn said.
“In addition, MTN plans on rolling out FTTH to high-density urban areas, such as high-end gated communities, boomed-off suburbs and high-rise apartment buildings. The 2014 investment sits over the R7b mark with a view of growing this going into 2015/16.”
Cell C
Founded in 2001, South Africa’s third – and much smaller – operator Cell C pledges to cut costs and increase competition in the market, and has led a provocative and loud campaign against Vodacom’s and MTN’s market dominance, with a number of publicity stunts aimed at instigating a price war and publicly accusing MTN of trying to retain high communications prices.
Cell C promised network investment of ZAR2.3 billion (US$222 million) in the coming year, with the addition of new sites envisaged as well as upgrading of existing infrastructure.
“In terms of investment, Cell C continues to make intensive investment in its network with a planned ZAR2.3 billion for CAPEX spend in 2014. The company has 318 additional sites planned for 2014,” Cell C spokesperson Karin Fourie told HumanIPO.
“Additionally, Cell C is in the process of swapping the RAN equipment of around over 1,000 sites from NSN to Huawei in a three-phase process, which should see the first two phases conclude by November this year. This will bring more stability into the network and increase the coverage. Transmission projects are also underway.”
Telkom
South Africa’s part state-owned Telkom has been focusing on a complete restructuring over the past year, as the company’s financials have struggled with dwindling fixed line revenues, and poor uptake of alternative services.
Asked by HumanIPO about investment plans for the coming year, Telkom said it was not in a position to comment.
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