Telecoms firm seals $365m financing for 4G/LTE network expansion in Nigeria, others

TO make 4G/ Long Term Evolution (LTE) readily available in Nigeria and other part of Africa, Smile Telecoms Holdings Ltd, which owns and operates mobile wireless broadband networks in the 800MHz band in Nigeria, Tanzania and Uganda, has announced that it has raised $365 million of debt and equity financing for its expansion.

According to the Parent company of Smile Communications Nigeria Limited, Smile Telecoms Holdings Ltd, at the weekend, the funding will be used to expand Smile’s existing 4G LTE networks and services, such that, by the end of 2015, the telecommunications firm will offer clear voice services, in addition to mobile broadband; and will have national coverage comparable to that of the largest 3G network in each of its current countries of operation.

It will also launch its broadband network in DRC early in 2016. Smile explained that the funding is comprised of$50 million of equity, raised from the Public Investment Corporation on behalf of Government Employees Pension Fund (PIC), and a $315 million multi-tranche, multi-jurisdictional debt facility led by Africa Export-Import Bank with participation from the Development Bank of Southern Africa, Diamond Bank PLC, Ecobank Nigeria, the PIC, the Industrial Development Corporation of South Africa Limited and Standard Chartered Bank.

As a result of this development, Smile’s shareholders now comprise Al Nahla Group, a Saudi Arabian-based company, which is the majority shareholder; Renven Investment Holdings, a pan-Africa investment vehicle, which represents majority Nigerian investors, among others; Verene, representing Smile senior management and social entrepreneurs from South Africa; Telecom Investments, a Saudi Arabian-based investment company; Capitalworks, an alternative asset management firm; the PIC; and Smile employees.

Under the terms, the telecommunications firm explained that the proceeds will be used to accelerate national network roll-out, including equipment and services provided by Alcatel Lucent and Ericsson, a full MPLS (Multiprotocol Label Switching) network, a London Point of Presence and expanded international backhaul services, and to fund operational expenditure and working capital.

Smile said is objective is to become the broadband provider of choice for super-fast data and clear voice in each of its markets and to provide the over 300 million potential customersin its four countries of operation with an efficient, reliable, quality tool to accelerate development and wealth creation.

Chief Executive Officer of Smile, Irene Charnley, said: “Now that we are fully funded to deliver national coverage of unrivalled super-fast Internet access and clear voice services, our priority is to ensure that our customers experience and benefit from the power of high speed mobile broadband compared to the narrowband services available to date, including how to effectively manage the superior experience in terms of data consumption.”

To the Chairman, Smile Communications Nigeria Limited, Dr. Ernest Azudialu- Obiejesi, the funding is an enabler of the telecommunications firm, which was founded in 2007 and incorporated in Mauritius, to deepen broadband penetration in Africa especially in key markets of Nigeria, Tanzania, Uganda and Democratic Republic of Congo.

He reaffirmed that “Nigeria is one of the most dynamic markets in the world and mobile broadband will continue to play a crucial role in transformation and development of the country. “Smile 4G LTE broadband Internet in Nigeria represents a considerable investment, and reflects Smile’s confidence in and commitment to the country’s development.”

According to the firm, technological advancement has facilitated the realization of creating an ecosystem for the 800MHz band that can overcome the restrictions associated with limited fixed line infrastructure and over-contended legacy networks and lead to higher broadband penetration, which is a key driver to economic growth.

Smile explained that the funding is one of the largest capital ever raised ever for a telecommunications operator in Africa and and that it brings the total funding committed to Smile since its founding in 2007 to approximately $600 million.

Deputy Chairman of Smile, Sheikh Mohammed Sharbatly, said, “I have recently had the joy of using the Smile network in Nigeria, and the quality is better than what we experience in the United Kingdom and in Saudi Arabia.

By licensing 800MHz spectrum for commercial use at an early stage relative to many other countries, including high-income ones, the governments of Nigeria, Tanzania, Uganda and the DRC have each demonstrated commitment to be at the forefront of the broadband revolution and to accelerate development and GDP growth, and we commend them.”

It will be recalled that in 2012, the company launched Africa’s first 4G LTE commercial networks in the 800MHz band (ITU “band 20”) in the East African market, starting in Dar es Salaam, Tanzania and then Kampala, Uganda.

This was followed by the launch of West Africa’s first 4G LTE commercial networks, also in band 20, in Nigeria starting in Ibadan then Lagos, Abuja and Port Harcourt.