MTN officials have told Parliament that the release of available spectrum would, in theory, lower data costs.<\/p>\n
South Africa has yet to migrate to digital broadcasts, a key requirement for opening up radio spectrum for faster and more widespread mobile internet services.<\/p>\n
Graham De Vries, head of corporate services, told the portfolio committee on telecommunications and postal services on Wednesday that more frequency would have a \u201csignificant effect\u201d on costs.<\/p>\n
\u201cIt will mean we will not have to roll out further base station structures,” he told MPs.<\/p>\n
\u201cIn general, it will lead to a reduction of our input costs, because we can apply it on top of our [existing] network costs.\u201d<\/p>\n
He was answering a question from DA MP Cameron Mackenzie. The committee was meeting this week to listen to presentations on the \u201ccost to communicate\u201d in South Africa.<\/p>\n
De Vries though did add caution, saying there were other costs involved that were not yet accounted for in the potential release of bandwidth.<\/p>\n
\u201cIn order to bid for the available spectrum, a bidding company needs a R3bn reserve price.<\/p>\n
\u201cOn top of that, there is no way of knowing what the final price for the available spectrum will cost once bidding concludes.”<\/p>\n
He also said he hoped that government would not “experiment” with the bidding process, given its importance.<\/p>\n
EFF MP Fana Mokoena, who had been critical of competitor Vodacom earlier on Wednesday, accused MTN of focusing its efforts in Nigeria more than in its home base South Africa.<\/p>\n
But MTN SA Chief financial officer Sandile Ntsele disagreed with Mokoena, saying it is difficult to compare across markets.<\/p>\n
\u201cWe are materially the same on a dollar-to-dollar basis,\u201d he said.<\/p>\n
\u201cIn general, we do a comparison across the 22 countries we operate in, and in general we stay the same [with regards to investment].<\/p>\n
\u201cI can clearly state we operate on a country-by-country basis. Each country has its own board of directors, its own targets etc,” Ntsele added.<\/p>\n
Ntsele said MTN Nigeria and MTN South Africa contribute approximately 65% of the group\u2019s profits.<\/p>\n
\u201cIt would be irresponsible not to have our mindset on these two markets.\u201d<\/p>\n
De Vries, meanwhile, who pitched his presentation at a less celebratory tone than competitors Vodacom, admitted there were many challenges amid the \u201cdata explosion\u201d in South Africa.<\/p>\n
\u201cOur revenues are flat, whilst data costs are increasing on a yearly basis,” De Vries said.<\/p>\n
\u201cThere are also external pressures that we cannot control. The devaluation in the currency has been driven down by 40%.<\/p>\n
\u201cThat means if we want to do the exact same thing operationally, it costs us 40% more.<\/p>\n
\u201cMost of our equipment is imported from overseas, and it is priced in dollars,\u201d De Vries added.<\/p>\n
He said that despite this, MTN has decreased voice and data tariffs by 58% and 73% respectively in the last five years. The company has also reduced marketing spend by 36% since 2011, he said.<\/p>\n
\u201cWe are in a very competitive market, and there is significant pressure to ensure we satisfy our customers.<\/p>\n
\u201cBut we also need to balance that with our shareholders\u2019 expectations, and it\u2019s a fine balancing act.\u201d<\/p>\n
Presentations continued on Wednesday. The committee was still to hear from Cell C, Telkom and Neotel.<\/p>\n
News24<\/a><\/p>\n Government wants to take Vodacom and MTN\u2019s mobile spectrum back<\/a><\/strong><\/p>\nMore on MTN<\/h3>\n