Nigeria's Ntel Seeks $1 Billion for Mobile-Broadband GrowthBy
Online phone users seen rising as smartphone takeup increases
Operators scramble for scarce low-band spectrum to launch 4G
Nigerian Internet provider ntel is seeking more than $1 billion to invest in 4G mobile broadband by 2020 as the owner of the former state landline company seeks to take advantage of a rising number of smartphone users in Africa’s most populous country.
“We are speaking to investors and to banks who are interested in a growth story for Africa," Chief Executive Officer Kamar Abass, 51, said in an interview on March 31. “We are seeing the very beginnings of a shift from a voice-oriented communications market in Nigeria to one that will be dominated by mobile broadband.”
Sub-Saharan African mobile Internet companies are attracting investment because of a lack of fixed-line infrastructure to support rising demand for online access. Smile Telecoms Holdings Ltd. raised $365 million in August to expand its wireless Internet network in Nigeria, Uganda and Tanzania, while Lagos-based MainOne Cable Co. said in July it plans to raise $300 million.
Africa’s biggest economy had about 149 million active mobile-phone lines as of end January, according to the Nigerian Communications Commission, yet most users are restricted to 2G voice and text messaging due to the low penetration of smartphones. Nigeria’s population is forecast by the World Bank to reach almost 207 million by 2020 from about 170 million now, and ntel expects Nigeria’s mobile-broadband customer numbers to rise significantly by 2020, Abass said.
MTN Group Ltd., Nigeria’s biggest mobile-phone operator, plans to expand Internet services after agreeing to buy broadband provider Visafone Communications Ltd. in January. MTN went ahead with the deal, which was challenged in court by Abu Dhabi-based Emirates Telecommunications Group Co, even as the Johannesburg-based company battles to reduce a record $3.9 billion fine in the country for missing a deadline to disconnect unregistered subscribers.
"MTN has been quite active in trying to acquire spectrum. It’s also tried to acquire it through the broadcasting agency," Amy Cameron, head ICT analyst at BMI Research, said by phone from London. "That 700-800 megahertz spectrum that telecoms operators use for 4G in particular is pretty scarce."
ntel’s investment target includes the $252 million that the company paid to acquire state-owned landline provider Nigerian Telecommunications Ltd. and its mobile unit MTel in 2015. It is owned by Nigerian investors including Olatunde Ayeni, the chairman of Skye Bank Plc, and has a partnership agreement with closely held Hong Kong Telecommunications Ltd., according to the company.
ntel will compete with Nigeria’s four mobile-phone companies, MTN, Etisalat, Bharti Airtel Ltd. of India and local provider Globacom Ltd. The company will start services in in Lagos and Abuja, the capital, on April 8.
— With assistance by Renee Bonorchis
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