MTN upbeat over prospects
Telecommunications company says it has spent more on its network than its rivals for three successive years
After underperforming for several years, MTN’s South African business is growing profit margins and poised for a "strong" 2018, it said on Thursday.
CEO of MTN SA Godfrey Motsa said the telecommunications company had spent more on its network than its rivals for three successive years, while it had also bolstered its executive committee with a series of strategic hires.
Ster-Kinekor Theatres CEO Wanda Matandela would join in March 2018.
Other recent appointments include South African Airways’s chief information officer, Phinda Ncala, former McDonald’s SA chief operations officer Nico Jacobs, and Giovanni Chiarelli, a former chief technology officer at Vodafone Romania.
Motsa said 15 of MTN SA’s 18 executive committee members were recent additions.
Enzo Scarcella, who joined as chief operating officer from Telkom, said MTN SA’s post-paid business was making "a very strong recovery" and was growing for the first time in several years. The company was reducing postpaid churn — the number of customers who move to other providers when their contracts expire — which could yield R300m-R400m a year in additional profits, Scarcella said.
MTN SA had "laid the foundation for a very strong 2018".
Motsa said the company’s capital expenditure programme meant MTN SA’s 3G network would cover 98% of the country’s population by the end of 2017 while its 4G network would cover 73% of the population, up from 43% in early 2016. More capital was being allocated to nonurban areas.
"The way we are approaching the budget as we move forward is that at least a quarter of it will go to rural areas. Our view is that in two or three years’ time, everywhere there’s 2G there should be 3G, and everywhere there’s 3G there should be 4G."
Meanwhile, Motsa said MTN SA had written to Telecommunications and Postal Services Minister Siyabonga Cwele asking for an extension to the 30-day window to comment on the Electronic Communications Amendment Bill, which deals with spectrum allocation.
MTN SA was "disappointed" with the changes, which were "too radical" and ignored the industry’s input.
Investec Asset Management portfolio manager Hannes van den Berg said the MTN management deserved credit for the "renewed focus on returns and efficiencies as well as new initiatives like Bright".
MTN Group was "making good progress" and "we have seen an improved performance in SA".
But Van den Berg said that MTN SA still had work to do with its postpaid and mobile enterprise operations.
The company was facing "struggling" voice revenue, downside risks if data prices fell given that "elasticity will not make that up immediately", regulatory uncertainty as well as increased competition as both Telkom and Cell C were "back in the market".