MTN goes big on rural telephony

MTN Ghana says it has earmarked over $12 million to provide at least 200 telecom cell sites in rural un-served and under-served areas across the country over the next three years.
This revelation by the telecoms giant comes at a time when telcos are being criticized for not investing enough to connect deprived communities – mainly in the rural areas – because they constitute low revenue for  telcos.
MTN Ghana CEO, Ebenezer Twum Asante told Adom News this year alone, it is working with Ericsson and the Ghana Investment Fund for Electronic Communication (GIFEC) to mount at least 55 masts to connect deprived areas by the close of July.

Photo: Ebenezer Twum Asante
He said over the three-year period, the remaining cell sites will be rolled out to benefits over 200 rural communities.
 “Apart from the $12m initial capital expenditure (CAPEX) which constitute eight per cent of our total CAPEX for the year, we will spend more money in our operational expenses (OPEX) to maintain those sites going forward,” he said.
Telcos have always said their projections show that the average revenue per user (ARPU) to be made from the deprived areas is not worth the intensive capital investment so they rather contribute one percent each of their annual profits to GIFEC to mount masts for co-location.
But it would appear, in spite of the fact that telcos contribute an average of 80% of the GIFEC money, the fund managers tend to invest in more incidental projects than in the core, which is to provide co-location masts.
On the contrary, GIFEC also accuse the telcos of deliberately refusing to use the universal access masts because it is not commercially viable, so government is planning lease them to new rural telephony operators to use for the facilitation of domestic roaming.
Asante however said MTN’s intentions for doing an exclusive investment into the rural and deprived areas is not to make money, but to ensure that the many Ghanaians left out of the information and communication technology revolution and its benefits are brought onboard.
Already MTN has a total of 2,459 cell sites across the country, out of which 715 provide coverage for rural and low ARPU communities.
“If our intentions for going big on rural telephony are to make money in the short term, we would not be doing so now because of we have loads of masts serving those areas already,” he said.
Meanwhile, the investment into the rural telephony infrastructure forms part of a total of $96 million earmarked for investment into infrastructure for 2016.

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