MTN Nigerian Communication Ltd., the country’s biggest mobile phone provider, said it got a $3 billion loan from a group of 17 local banks and seven foreign lenders to upgrade infrastructure.
The facility, which has a seven-year repayment plan, will fund expansion from 2013 to 2015, with more than $1.5 billion to be spent this year, Chief Executive Officer Brett Goschen told reporters in Lagos today. “The loan comprises $1.8 billion in additional financing and $1.2 billion in restructuring and rollover of existing facilities,” he said.
Nigerian mobile phone operators are investing in their networks to overcome frequent power cuts and the sabotage of facilities in the country’s mainly Muslim north, where Islamist militants target telecommunications companies for helping the authorities to track them.
Nigeria, Africa’s most populous nation with more than 160 million people, had about 155 million telephone subscribers as of January, according to the Nigerian Communications Commission. MTN Nigerian, the local unit of Johannesburg-based MTN Group Ltd., is the market leader with 47 million subscribers as of the end of last year, according to data on the NCC’s website.
Nigerian banks led by Guaranty Trust Bank Plc provided $2.1 billion of the facility to MTN Nigerian, with overseas institutions including Canada’s Export Development Bank and the Industrial & Commercial Bank of China lending $900 million, MTN Nigerian’s Chief Financial Officer Andrew Bing said.
Analysts are forecasting increased competition between the biggest operators in Nigeria after the NCC allowed users to switch providers without losing their phone numbers in a new ruling on April 22. Nigeria’s Globacom Ltd. and the local unit of Mumbai-based Bharti Airtel compete for second place in the market with 24 million and 23 million users respectively.