How much South African mobile operators invest in their networks

Vodacom’s network investment over the past year is significantly higher than South Africa’s three other major mobile operators.

MyBroadband compared the capital MTN, Vodacom, Cell C, and Telkom spent on their networks over the past year.

Vodacom’s network capital expenditure (capex) for the year totalled R11.2 billion, while the runner-up MTN spent R8.8 billion.

Telkom’s network investments were the third highest at R3.8 billion.

However, its network capex makes Cell C’s look minuscule. Cell C reported a network investment figure of R224 million, up from R195 million the previous year.

It should be noted that Cell C’s R195 million network capex marked a significant drop from R2.8 billion the year before.

This results from the mobile operator’s efforts to try and improve its financial situation.

The company shifted its strategy from competing directly with MTN and Vodacom on network spending to partnering with them instead.

Douglas Cragie Stevenson, then-Cell C CEO, said they gave up on competing with Vodacom and MTN on capex because it was impossible to match them.

Cell C recently completed its network migration and has agreements with MTN and Vodacom to provide network coverage.

MTN provides Cell C with a “virtual radio access network” for its prepaid and mobile virtual network operator subscribers. At the same time, Cell C’s contract customers roam on Vodacom’s network.

This means that Cell C no longer owns its own network infrastructure, removing the need for capital expenditure on network maintenance and expansion.

The chart below compares the capital that South Africa’s mobile operators have spent on their networks over the past year.

The higher network investment amounts reported by MTN and Vodacom over the past year include significant spending on backup power systems and security at their towers.

To fight Eskom load-shedding, mobile network operators rolled out generators and battery backups at their towers to ensure their networks stay online through power cuts.

In May 2022, Vodacom CEO Shameel Joosub said Vodacom spends more than R1 billion annually on batteries.

Jacqui O’Sullivan, MTN’s chief corporate affairs and sustainability officer, told MyBroadband that the mobile operator had spent “billions on batteries” to keep its towers up and running.

She indicated that the investment was paying off, saying MTN managed to keep its network stable.

While Telkom has also rolled out battery backups at its towers, it hasn’t said how much.

Despite spending less on its network over the past year, MTN retained the accolade of South Africa’s best mobile network in 2022.

MyBroadband Insights data from 1.36 million results from MyBroadband’s Android Speed Test App recorded between 1 January and 31 December 2022.

MTN had the highest average download speed at 68.84Mbps, followed by Vodacom at 48.58Mbps, Telkom at 28.54Mbps, Cell C at 23.41Mbps, and Rain at 15.14Mbps.

The mobile operator also had the best network in Tshwane, Cape Town, Johannesburg, Bloemfontein, eThekwini, Mangaung, Nelson Mandela Bay, and Ekurhuleni.

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