• MTN makes case for voice, data tariff increase
• Mobile service adoption to rise as operators invest $30b in network expansion
The Group Chief Executive Officer, MTN, Ralph Mupita, has asserted that the quality of service offered by some network operators in Nigeria, South Africa, and other African countries is far better than offerings from players in the United Kingdom (UK), United States of America (USA) and other European countries.
Mupita said as a top management executive, privileged to head operations of MTN in 19 African countries and the Middle East, travels frequently and is able to experience telephone services across: “I can say authoritatively that network quality in Nigeria, South Africa and other African countries is better to what is obtainable in countries like UK, USA and others.”
Speaking in Lagos during an interaction with journalists that just concluded the MTN-sponsored Media Innovation Programme (MIP), a six-month capacity building at the School of Media and Communication (SMC), Pan Atlantic University (PAU), Lekki, Mupita said “telephone networks in UK, USA are usually congested, with increased drop calls, undelivered SMS, among others, but in Nigeria, Ghana, South Africa and the rest of Africa, I can say we are better.”
While calling for more investment in infrastructure, especially digital, the MTN GCEO, said the telecommunications firm is thinking about the future, reason for investments in the Fifth-Generation (5G) network and other expansions currently going on across countries of operations.
“We believe that the 5G network is for Africa and Africans and we are ensuring that we don’t build an inferior infrastructure, but one that can satisfy the entire region. It must be noted that investing in digital infrastructure remains critical to unlocking the future and countries must invest,” he stated.
Mupita said sooner, about five years from now, 5G would enable economies including Nigeria, South Africa and other countries in the region to accelerate their development.
On his part, MTN Nigeria CEO, Karl Toriola, informed that massive work and investments have gone into MTN’s deployment in the country, which, according to him, is evident in some parts of Lagos, already activated and other areas, including Abuja, Ibadan, Owerri, Port Harcourt, Kano, which are to be activated in quarter one 2023.
He disclosed that the firm would densify the existing locations of MTN’s 5G coverage as expansion continues with focus on where there are terminals already, demands for the network and students’ population locations.
Though Nigeria’s Minister of Communications and Digital Economy, Prof. Isa Pantami, ordered reversal of recent 10 per cent tariff hike implemented by some telcos, MTN inclusive, Toriola, who said MTN has reversed it, however, restated that there was need for operators to increase tariff going by various challenges plaguing the economy.
Toriola, who said cost of deployment has risen, noted that MTN, despite the challenges, has continued to invest hundreds of millions of dollars and naira into these networks at a period where the naira is devalued and operators earn 100 per cent in naira.
“There is no industry in Nigeria today that has seen anything less than 60 per cent increase in tariffs, whether airline ticket, road transport, price of bread, garri and even electricity tariffs, which are also regulated. Every single industry in Nigeria in the past 12 to 18 months has had a significant increase in their prices. We are the only sector that has consistently, over the last 20 years, had a consistent decline in tariffs and it is not so long that this can go on before it starts affecting our quality of service and ability to invest in the future.
“So, over time, under the guidance of the regulator, which is the Nigerian Communications Commission (NCC) and policy supervision by the Minister, we would continue to ask and expect that there would be a gradual and reasonable uplift in prices to enable us to first absolve the inflation shocks we have experienced across the country on power, especially diesel. We operate on Microsoft, Huawei licenses, which are dollar denominated, and increase in staff salaries, among others. These equally need attention.“
Lending his voice to the issue, Mupita said globally, not just in Nigeria, even in Ghana, South Africa, the cost to invest has really gone up. He said MTN spends about $2 billion on capital expenditure every single year to keep the network at top class. He said half of the investment is the dollar index, “and you know what has happened to the dollar and other currencies, which have gone up even by 50 per cent. It means that the input cost of running the networks has increased significantly.
“So, operators globally are asking for honest price increase to enable them to continue to invest because without investments, the quality of the network will go down. I must say that the quality of the network here is pretty much nonexistent. We have some of the best broadband services in this part of the world, even better than AT&T. AT&T and Horizon would earn from a customer probably about $50 per month, which is the average revenue per user (ArPU). But across our markets as MTN, we are doing between $3 and $5 and we all are buying the same equipment. So, you can see that the economies are quite different, especially in one that you need to constantly deploy CAPEX of about $2 billion, of which Nigeria does about $800 million.”
MEANWHILE, while 515 million people across sub-Saharan Africa (SSA) have subscribed to mobile services in the region, representing 46 per cent of the population, the figure is expected to rise significantly as operators plan $30 billion network expansion between now and 2025.
The Global System for Mobile telecommunications Association (GSMA), which disclosed this in the just unveiled, “Mobile Economy sub-Saharan Africa (SSA) report 2022,” said by the end of 2022, operators across SSA should have invested $8.4 billion in Capital Expenditure (CAPEX); $7 billion in 2023; another $7 billion in 2024 and $7.1 billion by 2025.
On the mobile adoption milestone in the region, which is on the rise, GSMA revealed that by the end of 2022, there are now nearly 1.5 million 5G connections; 4G adoption reaches 20 per cent and smartphone adoption peaked at 50 per cent.
For 2023, the telecoms advocacy body revealed that 3G adoption will begin to decline, while across all networks, there should be one billion mobile connections with 80 per cent mobile broadband adoption.
By 2024, GSMA estimated 200 million 4G connections; 5G adoption to reach two per cent and 600 million smartphone connections. In 2025, there would be 40 million 5G connections, while 4G adoption reaches a third of total connections with 50 per cent mobile subscriber penetration.