MTN budgets R700m for rural telecoms
Managing director Maanda Manyatshe said yesterday that MTN’s acquisition of Dubai-based Investcom had given the company more insight into how to expand into rural areas. "Our commitments [to expanding rural services] will cost MTN between R500 million and R700 million over the next few years."
MTN recently concluded its acquisition of Investcom for $5.5 billion (R41 billion), making it the largest cellular operator in Africa and the Middle East.
Manyatshe was speaking at a presentation on cellphone number portability, which is due to become effective from September 18. This will enable consumers to keep their numbers if they change their cellular service provider. Cellular operators want an extension on portability until the end of October, to iron out technical issues including changes to billing systems and international roaming agreements.
Through a joint company, the three operators will spend R300 million in the first year on implementing portability.
Manyatshe said: "Number portability will be a bargaining chip for corporates. MTN supports portability as we expect it will benefit us. International research has shown that it is the second and third operators that benefit. It is the first operator that suffers."
Vodacom was the first cellular operator in South Africa.
In rolling out infrastructure to rural areas the issues MTN grappled with were: "How do we go into rural areas at a lower cost? Can we put in infrastructure in rural areas that do not have all the bells and whistles that infrastructure in Sandton has?" Manyatshe said.
For example, rural infrastructure might have limited data capability. "What happens if someone from Sandton goes to a rural area and expects the same service … What are the consequences?"
Cellular operators have negotiated commitments to expand services to rural areas in order to get permission from the Independent Communications Authority of SA to roll out third-generation (3G) technology and to access the 1 800 megahertz frequency spectrum.
MTN is rolling out more than 300 3G base stations.
Over five years, each cellular operator is obliged to distribute 2.5 million SIM card packages and provide 125 000 cellphones. Over three years, each has to provide internet access and 1 400 workstations to 140 institutions for people with disabilities. Over eight years, each has to provide internet access to 5 000 schools.
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