MTN’s tower sites show how SA is trending towards power poor Nigeria

A growing number of power outages have caused MTN’s network availability in SA to drop below levels in Nigeria, a country where electricity from the national grid is virtually nonexistent. 

Mobile operators have struggled as extended power cuts have sometimes depleted the batteries of their cellphone towers, leading to the signal being dropped for customers.

MTN group head Ralph Mupita told Business Day that networks built in its two largest markets — SA and Nigeria — are vastly different due to power considerations. 

In Nigeria, where the grid has failed to meet demand for years, MTN built its network with backup power from the start, knowing it was essentially responsible for its own power generation. In SA where the assumption at MTN’s inception in 1994 was that Eskom would take care of all power requirements, provision for backup was not in mind.

A practical example of this disparity is with the size of cellphone tower sites. These are much bigger in Nigeria than in SA because the operator needs space to provision battery systems, generators or solar. In SA, sites are inherently compact. Having to put backup power systems in such tight spaces is one of the factors adding costs for network operators looking to mitigate the problem. 

“Let’s start with SA, which has 12,900 sites and they have different technology layers 2G, 3G, 4G, and now 5G. We’ve designed that whole network on the basis of 100% power availability. So that goes into the design of the sites, which means very small physical real estate in and around the sites, generally,” said Mupita. 

“These have been designed with no backup power considerations, unless it’s at switch centres, hubs, and data centres. That’s where you’d see some redundancy in power. That’s true for ourselves and the other market participants, Vodacom and Telkom.”

Power outages cost MTN R695m, according to estimates from its 2022 annual results. This amounts to 3.4% of local core earnings of the R235bn company.

“On the other side is the example of Nigeria, which has 17,000 sites. It was designed with the view that there is only 5% of power from the grid; 95% of the power has to come from other sources, particularly diesel generators. So the Nigeria network has already been designed to take into consideration that every site requires a configuration of diesel generator and/or batteries for backup power.”

In that market, he says IHS — which provides network infrastructure for MTN — moves 300-million litres of diesel per year to keep that network available at 99.75%. As such, MTN Nigeria has a high network availability because it was designed with the understanding that the company cannot rely on grid power. 

“Obviously SA grid power has fallen below 90%, so the network availability has fallen below 90% because we’ve moved to heightened levels of load-shedding, materially above stage 4. This really impacts network availability, the ability of batteries to recharge,” said Mupita. 

“That juxtaposition between SA and Nigeria is very important. We now need to view the [SA] network as if it will increasingly look like something that is akin to what we see in markets like Nigeria.”

During 2022, MTN deployed more than 2,000 additional generators to counter the effects of stage 4 and higher load-shedding. It now uses more than 400,000 litres of fuel a month to keep these generators operational. Vodacom has spent close to R2bn on extra power for its towers in the past two years.

And this is all taking place in an environment of higher fuel and other price increases, driven by global supply chain challenges and the Russian invasion of Ukraine.

MTN, like its competitors, has had to increase spending on security as its network sites are targeted increasingly by criminals stealing and vandalising its generators, batteries, solar panels and network equipment.

Security risks and damage have risen to a point where the operator has now redesigned its sites to include bunkers to house its backup power equipment. 

gavazam@businesslive.co.za