MTN to improve service quality

Leading mobile telecommunications company, MTN, has earmarked a total of US$163.5 million as capital investments for 2016 alone to upgrade its network infrastructure and improve quality of services.

The investments include US$62 million to expand and improve network installations, US$18 million in Long-Term Evolution (LTE) infrastructure to support the newly acquired fourth generation (4G) network and US$16 million to improve information technology (back-end support) infrastructure.

The Chief Executive Officer of MTN, Mr Ebenezer Twum Asante, who disclosed this at the company’s Editors Forum and Stakeholder engagement, said the company already had many 4G sites available across the country but it would continue to invest to expand the coverage until its launch around June 2016.

The 4G LTE, which is the latest in mobile technology, offers the fastest speed and efficiency important for driving the broadband and growing internet connectivity across the world.

MTN currently has 69 4G sites operational and want to continue to invest to optimise potential before the launch of the service somewhere in June this year.

“Since we acquired the 4G license in December, we have started deployment, although we have not gathered the critical mass. We are committed to full deployment in 2016,” Mr Asante stated.

Revenue growth

With annual revenues growing by 15.9 per cent to close the year at GH¢2.32 billion, with 41 per cent profit before tax margin, thanks to a 17.3 per cent growth in subscriber base in 2015 and data subscribers, the company says it was poised to invest to improve its delivery and service quality.

Data revenues grew by 85.2 per cent, contributing 30.6 per cent to total revenue supported by improved device strategy and focus on 3G coverage and quality. Mr Asante said smartphones increased by 40.8 per cent to 3.2 million subscribers

MTN Mobile Money has been growing steadily. The service grew by 68.1 per cent to 5.7 million subscribers, who together contributed about GH¢138.9 million to the company’s headline revenues.

To support growth in that space, MTN has registered a subsidiary, MTN Mobile Money Ltd to manage and grow the six million subscribers and 35,000 merchants.

Mr Asante said MTN was working to offer interest on mobile money balances to encourage adoption and use and eliminate any stress of the individual negotiating interests with their banks.

National contributions

MTN paid a total of GH¢675.6 million to the government as direct corporate tax, up from the GH¢605 million in 2014.

With its wide partnership with different suppliers, merchants and stakeholders, MTN contributes significantly to the country’s gross domestic product. The telecom industry contributes about 10 per cent to the country’s GDP; MTN contributes between 60 per cent and 65 per cent of industry productivity.

Call to revise FSL

The GH¢677 million tax contributions the company paid includes GH¢33.3 million in fiscal stabilisation levy (FSL), which selected industries in the country pay to the government.

Mr Asante said the levy was having a toll of businesses, considering the already austere operating environment.

The MTN CEO said although the levy was introduced with sunset clauses, it had continued and it was time it was abolished.

Already, many of the telecom companies in the country hardly make profit, with some recording losses and breaking even.

Abolishing the FSL, which is deducted before profit is declared, will go a long way to make the telecom industry robust to continue its positive contributions to the economy of Ghana.