(formely M-Cell Limited) - Business Report 2003 - MTN Group

MTN International
(continued)
In less than two years of operation MTN Nigeria
has emerged as an integral and essential part of
the Nigerian socio-economic environment. This
is the result of the company’s focused
commitment to its business objectives coupled
with a genuine determination to make a positive
contribution to the country’s economic growth
and development. MTN has become the preeminent
brand in Nigeria, with brand
recognition of over 95%.
Subscriber numbers increased to 1 037 000 at
year-end compared with 327 000 in 2002. The
company has a leading GSM mobile market
share. ARPU levels at US$57 continued to be
higher than initially expected.
Due to the high demand for mobile
communication services, MTN Nigeria’s network
was occasionally challenged by significant
congestion. In order to manage this, the sale of
pre-paid packages was initially slowed down
through increased connection fees and
subsequently through a temporary restriction
on the sale of pre-paid packages.
To address the increasing demand, MTN Nigeria
significantly expanded its infrastructure in the
country during the year under review. In January
2003, it formally commissioned “Y’helloBahn”, the
3 400 kilometre microwave transmission
backbone connecting the north of Nigeria to
the south-east and south-west at a cost of
US$120 million. Y’helloBahn not only enhanced
call quality but also expanded coverage through
radio base stations which were systematically
erected along much of its path.
At year-end, some 40 cities, more than
100 smaller towns and villages and more than
700 communities had been connected to the
network. Currently, MTN Nigeria’s geographic
coverage of the country is estimated at 14%,
while population coverage has reached an
estimated 38%. The company has installed 478
base stations, 11 mobile switching centres across
the country and is in the process of installing
two additional switch centres in Kano and
Asaba. The company currently has eight
Friendship Centres, which are specialist retail
and customer service facilities, with a ninth
shortly to go live in Ibadan. Five of the
Friendship Centres are located in Lagos.
In the year ahead, MTN Nigeria will continue to
focus on building additional network capacity,
while also extending coverage especially to the
north-east of Nigeria. The second phase of
Y’helloBahn, which will effect this expansion, is
expected to commence soon. It will traverse
more than 16 states and bring additional
improvement to network quality. The rate of
constructing radio base stations is also expected
to increase.
MTN Nigeria will continue to make a positive
impact on the lives of the people of Nigeria by
investing in social projects in critical areas such
as child welfare, women empowerment,
HIV/AIDS, arts and culture and sport.
In the light of its strong performance to date
and in order to further expand its network, MTN
Nigeria plans significant additional capital
expenditure and investment. The company is in
the process of raising project finance facilities of
US$380 million.
Key areas of future focus will be a continued
expansion of network capacity to alleviate
congestion rates and to prepare for the entry of
an additional fixed/mobile competitor expected
to be launched during the current financial year.
The major challenges facing MTN Nigeria are to
meet the growing demand for its services in
major cities and to launch information and high
speed data services to meet market
requirements.
On the political front, the re-election in May of
President Olusegun Obasanjo for another fouryear
term will provide continued political
stability. This will provide additional impetus for
foreign direct investment into the country.
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MTN BUSINESS REPORT 2003