Ralph Mupita said on Tuesday that he expects consolidation of mobile network operators in the markets in which the group operates as high capital investment requirements make it increasingly difficult for smaller operators to keep up.
Mupita, speaking during a PSG webinar hosted by broadcaster Bruce Whitfield, said MTN spends more than US$2-billion/year on network infrastructure. This sort of spending means smaller market players are going to find it difficult to compete. “The days of five- or six-player markets, or even four-player markets, not just in South Africa but more broadly across our markets, are no longer sustainable,” Mupita said.“There is not enough of a profit pool for people to … get the right return. Consolidation is inevitable because the amount of capital investment required to move from 3G to 4G and ultimately 5G is of such a nature that number threes, number fours, number fives cannot make a decent return on their invested capital.
Turning to the recent spectrum auction in South Africa, during which MTN secured 100MHz of additional frequencies, Mupita said the country “probably lost a decade and a half of development” due to the delays in allocating access.