Smile Telecoms Holdings Limited, which
owns and operates mobile wireless 4G LTE broadband networks in the
800MHz band in Nigeria, Tanzania and Uganda, has announced that it
raised $365 million of debt and equity financing.
The funding will be used to expand
Smile’s existing 4G LTE mobile broadband networks and services, such
that by the end of 2015, Smile will offer clear voice services and have
national coverage comparable to the largest 3G network in each of its
current countries of operations. Smile will also launch its broadband
network in Democratic Republic of Congo early in 2016.
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 African
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.
Smile’s shareholders now comprise Al
Nahla Group, a Saudi Arabia-based company, which is the majority
shareholder; Renven Investment Holdings, a pan-African investment
vehicle, in which Nigerian investors, including the Obijackson Group,
are the majority; Verene, representing Smile senior management and
social entrepreneurs from South Africa; Telecom Investments, a Saudi
Arabian-based investment company; Capitalworks, an active alternative
management company, specialising in investment in the African
mid-market”; the PIC, and Smile employees.
Under the terms, the funding 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’s objective is to become the
broadband provider of choice for super-fast data and clear voice in each
of its markets and to provide over 300 million potential customers in
its four countries of operation with a fast, reliable and high quality
platform to accelerate development and wealth creation.
There is persuasive evidence linking
broadband to job creation; the Brookings Institution states that “for
every one percentage point increase in broadband penetration, employment
is projected to increase by 0.2 to 0.3 percent per year.”
Furthermore, according to the Broadband
Strategies Handbook by The World Bank, “a 10 percent increase in the
penetration rate of broadband in developing countries is associated with
a 1.4 percent increase in GDP per capita.”
The funding is one of the largest
capital raises ever for a telecommunications operator in Africa and
brings the total funding committed to Smile since its founding in 2007
to approximately USD600 million.
Irene Charnley, CEO of Smile, 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.”
Sheikh Mohammed Sharbatly, deputy
chairman of Smile, 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.”
Ernest Azudialu, chairman of Smile
Nigeria, said: “The availability of a reliable high-speed, broadband
internet service in the country will help businesses and individuals
become more productive and efficient, and this in itself is an economic
enabler. I am pleased to be part of a company that has the potential to
improve the lives of the people in Nigeria, and the other African
countries that we operate in, as well as create employment
opportunities.
“Founded in 2007 and incorporated in
Mauritius, Smile is a pan-African telecommunications group with
operations in Nigeria (Smile Communications Nigeria), Tanzania (Smile
Communications Tanzania), Uganda (Smile Communications Uganda) and the
Democratic Republic of Congo (Smile Communications DRC) and has an
associate company in South Africa. Smile has a single transformative
objective of using the best and most innovative technologies to provide
its customers with fast, reliable, high quality, easy to use and
affordable communication services.
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, starting in Ibadan and then
Lagos, Nigeria.
Smile’s vision and mission is to be the
broadband provider of choice in all its markets and enable its customers
to benefit fully from the Internet world for data and voice.
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