Focus on coverage capacity than license fee MTN tells govt

The management of MTN Group, Africa’s largest telecoms network has called on African governments to downplay high service license fees and uphold company’s capacities to cover massive areas with infrastructure for service delivery.

Barring his mind on critical issues ahead of making presentations at TMT Finance Africa in Cape Town soon, Executive, Group Mergers and Acquisitions at MTN, Kholekile Ndamase argued that Governments should have a careful plan when considering the licensing questions such as coverage obligations vs license fees and funds to finance rural connectivity.

According to him, “If government could forego the immediate remuneration of a license fee and opportunity costs of localisations, but instead placed reasonable coverage obligations on operators, it may be more beneficial in the long run to have all their citizens connected to digital and have them participating in the digitally-enabled economy. Making more spectrum available in certain markets would also reduce network congestion and Capex expenditure which will allow the much-needed capital to be spent in the more underserved areas.”

In his submission, the CFO at CSquared, Google-backed African fibre network operator, Alexander Kiel said “Fibre, like other infrastructure, is a game of scale; we do expect some consolidation to happen over time, with it most likely to start with transfer of management of public fiber assets to private operators.”

“Over time, as fibrecos increase in scale and expertise, Kiel also expects to see more sale and lease-back deals between the fibrecos and the mobile operators.

For Envir Fraser, CSO & Partner at Convergence Partners, an impact investment management firm focused on the telecommunications, media and technology sector in Africa, expects broadband to continue offering investment opportunities as the need for high quality broadband increases with step changes in prices.

“This does mean that the opportunities are shifting from pure greenfield builds and opportunities to brownfield expansion and consolidation in the sector. The needs for “big pipes” to realise the 5G reality will also need increased investment in connecting towers and high sites to high-speed fibre or wireless backhaul networks”, says Fraser.

Digital and broadband infrastructure investment will be clearly one of the top priorities for Africa’s key telecom operators and investment firms in 2019.
Leaders from the largest African telecom, media and technology companies, investment banks and investors are meeting to assess the latest investment opportunities at the annual TMT Finance Africa in Cape Town 2019 conference on March 28.

Over 75 key speakers have been announced for the event, which features CxOs and senior executives from Vodacom, MTN, Rand Merchant Bank, Vumatel, Helios Towers Africa, ENSafrica, CSquared, Dark Fibre Africa, Convergence Partners, Seacom, Angola Cables, Standard Bank, IFC World Bank, DLA Piper, WIOCC, Paix Data Centres, BCX, European Investment Bank, Investec Asset Management, GreenWish Partners and others.

Key sessions at the senior executive only event include: Telecom Leadership Africa; Broadband Infrastructure; Digital Infrastructure Africa; Next Generation Media; Powering Mobile Towers; Data Centre and Cloud; Mergers and Acquisitions; TMT Investor Strategies; Broadband Infrastructure; Financing TMT; Fintech and Mobile Money; and Smart City.