The Nigerian arm of Africa's biggest mobile phone operator MTN has signed loan agreements worth $2.15 billion with 15 Nigerian and two other banks to fund expansion.
MTN Nigeria said a consortium of 15 Nigerian banks would provide it with a N250 billion ($1.7 billion) five-year syndicated loan.
In addition, Germany's KfW Ipex will provide a $250 million credit export facility for the purchase of equipment from Sweden's Ericsson; and the Industrial and Commercial Bank of China (ICBC) will provide a $200 million credit facility for purchases from Huawei Technologies.
MTN paid $285 million for one of four GSM licenses in Nigeria in January 2001. To date, in excess of $1.8 billion has been invested building mobile telecommunications infrastructure in the country.
Since launching in August 2001, MTN has steadily deployed its services across Nigeria. It now provides services in 223 cities and towns, more than 10,000 villages and communities and a growing number of highways across the country, spanning the 36 states of the Nigeria and the Federal Capital Territory, Abuja, with many villages and communities being connected via telecommunications for the first time ever.
By 2006 the companyÔÇÖs signal had reached over 94 million people, representing about 80 per cent of Nigeria's total population living across about 58 per cent of Nigeria's land mass. The company currently covers some 552 local governments, either wholly or partially.
MTN Nigeria's heavy investment in infrastructure to enhance the quality and capacity of its network during 2008 and 2009 helped boost subscriber numbers. As of 31 March 2010, MTN Nigeria had over 33 million customers.
Commenting on the announcement, MTNÔÇÖs CEO Ahmad Farroukh said: "These facilities provide us with a strong financial basis to pursue our goal of extending service to more Nigerians who are yet to experience the telecom revolution, while also improving the quality of service on the network.
"The loans demonstrate immense confidence by these global financial players in the managerial competence of MTN and its commitment to its mission of providing peerless telecom services across Nigeria. The loans will go a long way in fast-tracking our network enhancement efforts."
The funding announcement follows India's Bharti AirtelÔÇÖs recent $9 billion acquisition of the African operations of Kuwait's Zain.
Bharti aims to have 100 million subscribers and $5 billion a year in revenue in Africa by 2012/13 and is likely to pose a serious challenge to MTN's market leading position in Nigeria, Africa's most populous nation and its biggest telecoms market.
