MTN is set to invest in the region of GH¢1.1 billion this year in capital expenditure (capex), with a particular emphasis on network capacity and infrastructure expansion, its Chief Executive Officer (CEO), Selorm Adadevoh, has said.
He made this known as he took his turn at the Ghana Stock Exchange (GSE) – initiated ‘Facts behind the Figures’ session for listed companies.
According to him, the move is to ensure MTN meets the increasing demands, particularly of data, of its growing customer base. Mr. Adadevoh stated that this has gained added prominence due to the rapid rate of digitalisation – which in his estimation has been accelerated by three to five years as a result of COVID-19.
Touching on the company’s revenue from data, which was up 21% from 2019, he said: “one of the biggest challenges for us during the COVID-19 era has been the acceleration of digitalisation by approximately three to five years. It is hard to put a number to it but we think it is around the three to five-year mark, which basically means that the type of demand we would have expected to see in three to five years has happened a lot earlier.
What this means is that it has put a lot of pressure on our network and the capacities that we were running on before COVID-19 and we have had to find ways to invest,” he explained during the virtual event.
Whilst the figure represents a 21.4% decrease from the GH¢1.4 billion expended in 2020, the MTN chief explained that a sizeable portion of the 2020 expenditure due to a spectrum license. He however stated that the investment in non-negotiable, owing to the current data deficit in the country and its implication on productivity across the board.
“We continue to invest heavily in our networks because we believe there is enough growth but also because we believe there is a data capacity deficit currently in Ghana, where the demand for data has outpaced the rate at which capacity is coming into the market. The investment appetite is a positive one and we encourage the entire industry to do so,” he remarked.
Losing its voice?
With the shift towards digital channels, voice growth has been the causality. Whilst voice grew by 8.1% year-on-year (YoY), it was 11.3 percentage points lower than the 19.4% witnessed in 2019. However, minutes of usage (MOU) per subscriber per month was up 12% to an average of 417. This was largely attributed to downward price adjustments to voice charges.
Despite being an outlier, seeing that most operators across the globe recorded negative growth for voice in 2020, Mr. Adadevoh concedes that the trend of diminishing voice contribution is expected to continue.
“Part of our diversification strategy is to see more growth, acknowledging that voice will continue to be under pressure and we have seen trends in other markets that reflect that. As such data, mobile money and enterprise business are really our core growth pillars going forward, to substitute the decline that we expect to see later on in the coming years.”
Data
Mr. Adadevoh further disclosed that data transmitted through MTN’s network was up 105% to 523,372 TB YoY. This is as smartphone penetration is approaching the 50% mark on the network, with some 10.5 million active smartphones.
Digital revenue declined by 6.2%, due to “the impact of applying a Principal vs Agent (IFRS 15) accounting standard across the MTN Group in 2020.” Excluding this, digital revenue would have grown by 34.5% YoY. This is as enterprise contribution to service revenue grew from 4.2% to 5% for the year.
“Our plan is to have 4G on every site in Accra and in our big cities, and by the end of next year, we will have majority of our sites on 4G and the few that are left, we will continue that exercise in 2023. We now have a significant number of sites; about 1,875 that now have 4G,” he added.
Source: thebftonline.com
