MTN South Sudan Gets Boost as Hopes Rise That War Is Ending

SOUTH SUDAN (Capital Markets in Africa) – MTN Group Ltd.’s South Sudan unit said it’s investing at least $30 million in revitalizing and expanding its operations as a new deal to end a five-year civil war brings relative peace to much of the country.

Reviving transmission sites, upgrading to 3G and adding new coverage — they’re all planned by MTN South Sudan, one of the two remaining mobile-phone operators in the country. After a period of cutbacks for the unit, the expansion is a sign of confidence in the East African nation roiled by violence and economic chaos whose warring sides signed a peace accord in September.

“Given the peace process and the implementation of it, there is relative stability in the country,” Khumbulani Dhlomo, MTN’s local head of corporate services, said in an interview. “To add to that, the government has undertaken to support us in providing security escorts when we do our network restoration and expansion.”

South Sudan’s conflict has claimed an estimated 380,000 lives and sparked a regional refugee crisis since it erupted in December 2013. Its oil-dependent economy also slid into crisis, as a fall in crude production and lower prices hit government income, sending inflation rocketing. Currency shortages forced companies such as Anheuser-Busch Inbev SA’s local unit to suspend operations.

Doubling Capacity
President Salva Kiir and the main rebel leader are supposed to form a transitional government in May, although there have been recent warnings that the accord is at risk of collapsing.

MTN, which competes with Zain South Sudan, now plans to double its network capacity and switch back on idled transmission sites, most of them in areas such as Western Equatoria, Bahr el-Ghazal and Upper Nile where the conflict was most intense, Dhlomo said.

“Currently 200 sites are working in the country and if we build everything, we will be looking at around 410 sites,” he said in the capital, Juba. As its operations revive across South Sudan, MTN — a unit of Africa’s biggest mobile-phone company by sales — will also require more staff.

“We are recruiting as we speak, especially in the regional areas,” Dhlomo said. MTN South Sudan has about 1.1 million subscribers and expects that number to “grow significantly” as it increases its coverage.

The investment, estimated at between $30 million and $35 million, comes after South Sudan’s government granted a long-awaited operational license to MTN and the company reviewed its growth strategy, Dhlomo said.

South Sudan’s communications regulator this month more than doubled the tariff companies should charge customers for calls, citing currency devaluations.

Source: Bloomberg Business News