The Multinational Communication Company MTN has pledged to spend USD1.583 billion in growing its infrastructure in Nigeria this year, promising that more base transmission stations (BTS) will be built to change customer experience on the network.
According to Akinwale Goodluck, corporate services executive, MTN Nigeria, the R28 billion earmarked for capital expenditure (capex) for the Group’s 22 countries of operations this year, a slightly less than 50% (R13 billion) of that amount will come to Nigeria.
Following the MTN Group financial report, after a challenging year, Nigeria reported a decline in EBITDA of 6,2%.The Telco’s results for the year ended 31 December 2012 shows that, total revenue grew by 7,1% to R41,4 billion (about N716 billion) from R38,6 billion (about N668.1 billion) in the previous year.
Earnings before Interest, Taxes, Depreciation and Amortization or EBITDA is an approximate measure of a company’s operating cash flow based on data from the company’s income statement and is always calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, and amortization.
Goodluck blamed the fall in financial contribution from Nigeria to the MTN Group to about 30% decrease in tariffs in the country, occasioned by the display of exuberance by the operators.According to him, the many freebies that were extended to the subscribers on the network led to the decline of value from the industry.
The regulator of the industry, the Nigerian Communications Commission (NCC) played a big role to stop promotion and lotteries on the network, adding that MTN, as a business organisation, takes the interests of its customers seriously. Goodluck said that “As a business, we have taken steps to ensure that the interest of our subscribers are protected by not sacrificing quality service on the altar of customer acquisition.”
The Group’s allocation to its Nigerian operation for 2013 is the highest in all its over 20 countries of operations.
Goodluck, who recalled that USD1.3 billion was used as Capex for MTN Nigeria in 2012, pointed out that Nigeria is still privileged in the current year by taking the lion share of the Group’s total capital expenditure.
He reported that, the current USD1.5 billion is directed at network expansion such as the building more base stations and fibre transmissions across the country.
He commented that the fresh investment will enable the over 45 million subscribers on its network to enjoy improved access voice and data services with better coverage.
GoodLuck expressed that, MTN Nigeria did not only fully capitalise its USD1.3 billion Capex for 2012 but also used the USD300 million carry-over Capex for 2011 to embark on its soon-to-be-completed network modernisation and swapping exercise which began early last year.
He reported that the telecom firm, which currently has about 9, 000 sites across the country, will build and upgrade addition 5, 000 base stations on its 2G network and about 4, 000 sites on 3G network.
“Looking at MTN Nigeria, we continue to grow our voice network and also grow our data business at 100% rate annually. The data business is going to be a lot more significant than voice.
“We’re seeing an increase in demand for data services and that informs the investment that we are putting in on 3G data networks. Voice is king. Data is a very ambitious prince but still a boy,” he said.
MTN Group results for the year ended 31 December 2012 showed solid progress in growing subscribers, revenue and Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA).
Highlights of the results depict that Group subscribers increased by 15.1% to R189.3 million∙ Revenue increased 10.9% to R135,112 million and data revenues increased 58.5% to R14,574 million∙
EBITDA increased 7.0% to R58,564 million.EBITDA margin was stable at 42.9% and Capex of R30 101 million positions the Group for continued growth.