How much South Africa’s mobile providers spend on their networks

3 years ago 1

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Vodacom trumped South Africa’s other major mobile operators over the past year when it comes to network investment.

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

The mobile network operator spent R11.1 billion on expanding and maintaining its networks, compared to the runner-up MTN’s R9.1 billion spend.

Telkom is a distant third with its significantly less R2.8 billion capex.

However, Telkom’s network investment is still massive compared to Cell C’s. Cell C’s network spending dropped from R2.3 billion annually to R195 million.

This is thanks to the mobile operator’s strategy to try and improve its finances.

Cell C changed its strategy from competing with MTN and Vodacom on network spend, to partnering with them instead.

The mobile operator has concluded agreements with the big two to piggyback on their network infrastructure.

In addition to roaming or network sharing agreements, Cell C has contracted MTN to build and operate radio access network infrastructure on its behalf.

This allows Cell C to continue using its spectrum assets and not rely solely on Vodacom and MTN’s wireless network capacity.

Cell C cut its network expenditure from billions to millions per year through this strategy.

It also promises Cell C customers wider and higher quality network coverage without the mobile operator having to fork out billions to expand and maintain a network.

Cell C CEO Douglas Cragie Stevenson said the mobile operator threw in the towel on competing with Vodacom and MTN as competing with their network investments is impossible.

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

South Africa’s mobile operators’ network spending over the past year likely includes significant investments in backup power solutions.

In May 2022, Vodacom CEO Shameel Joosub revealed Vodacom spends over a billion rand a year on batteries.

Although the goal is to keep its whole network operating during power cuts, Joosub said ensuring that all 15,000 of their towers had sufficient backup batteries would be expensive.

In September 2022, MTN corporate affairs chief, Jacqui O’Sullivan, said the mobile operator had spent “billions on batteries” for its network towers.

“It’s tough, we’re managing to keep our mobile network stable, but that’s also because we’ve spent billions on batteries,” she said.

The battle for South Africa’s best mobile network is fought primarily between Vodacom and MTN, with the latter coming out on top in 2022 despite spending less on its network.

MyBroadband Insights’ annual Mobile Network Quality Report for 2022 shows that MTN has the best mobile network in South Africa.

Based on 1.36 million results from MyBroadband’s Android Speed Test App between 1 January 2022 and 31 December 2022, MTN beat the rest of the field regarding mobile download and upload speeds.

The mobile network operator achieved an average download speed of 68.84Mbps in 2022, while its upload speed was also the highest at 19.77Mbps.

This is compared to average download and upload speeds of 48.58Mbps and 11.62Mbps, respectively. The network speed comparison can be summarised as follows: