South Africa’s three largest telecommunications operators – Vodacom, MTN and Telkom – collectively spent R27-billion on network infrastructure in the past year.

In the 2025 financial year, Vodacom outspent its rivals with capital spending of R11.5-billion in its South African network. MTN South Africa was close behind with R9.8-billion in spending, with Telkom’s capex in third place at R5.8-billion.

The figures exclude the cost of land leases for network sites and, in Telkom’s case, include spending on fibre. Also, the numbers used are for Telkom and Vodacom’s year-end of 31 March 2025 and MTN’s for the financial year ended 31 December 2024.

Over a 15-year period from 2010, as shown in the chart below, Vodacom demonstrated a steady rise in its capex spending compared to its main two rivals, which have displayed intermittent periods of markedly increased and then decreased spending.

Speaking to TechCentral following the release of Vodacom Group’s annual results to 31 March 2025 last month, group CEO Shameel Joosub said the operator wants to align its infrastructure spend within a guidance of between 13.5% and 14% of revenue. The chart below, which compares the three operators’ capex, shows Vodacom’s spending has closely followed its revenue curve in the past decade and a half.

MTN’s steep acceleration in capex between 2014 and 2015 is a reflection of the operator’s attempt to take on the then-market leader Vodacom in network quality and performance. As shown in the chart, the subsequent dip in MTN’s capex served to erode gains in prior years, leading to its decision once again to increase network spending from 2020. An escalation in load shedding also contributed to increased network spend by South African operators since the turn of the decade.

Cost burden

At first glance, Telkom’s lower spend could be interpreted as reflecting its smaller size and proportion of market share compared to Vodacom and MTN. But this is only part of the story: the company uses a “smart capex” strategy, which aims to deploy capital as efficiently as possible to gain a competitive edge against its bigger rivals without spending as much as they do.

Speaking to TechCentral at the group’s results for the year ended 31 March 2025 on Tuesday, Telkom Consumer CEO Lunga Siyo said legacy networks, along with network modernisation efforts, are a high cost burden for its rivals. Vodacom and MTN’s networks are characterised by four generations of radio technology – 2G, 3G, 4G and 5G. Telkom Mobile, on the other hand has a simpler network architecture dominated by 4G.

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According to Siyo, Telkom Mobile also makes extensive use of the 800MHz spectrum it acquired at the 2022 spectrum auction, which has the capacity to cover larger areas than higher frequency bands.

In the years leading up to 2023, the worst year on record for load shedding, mobile operators were forced into directing more capex into network resilience. Batteries and diesel-burning generators were added to keep towers operational.

According to MTN South Africa CEO Charles Molapisi, the company will this year reduce its capital spending to about R6.5-billion. The additional R3-billion/year spent in recent years was earmarked for network resilience efforts due to load shedding. He said MTN has invested R95-billion in its network over the last decade.

“We pretty much have a solid 4G network, our 5G population coverage is above 44%, so we are now well positioned in terms of the capacity we have to monetise the network. So, our focus now is how we can best use it,” said Molapisi.

Even as the load shedding picture has improved over the last year, there is no clear indication that the problem is a thing of the past. But for Vodacom, the improvement in energy supply has eased pressure and freed up money that can be used to grow its network.

Read: South Africa among world’s most cost-effective for mobile spectrum

“The more stable energy outlook has allowed us to redeploy capex into growing the 5G network again. And then of course adding capacity, modernising the sites, fibre to the sites, improving our IT platforms and so on,” said Vodacom’s Joosub. – © 2025 NewsCentral Media

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