Telecommunications Giants, MTN Nigeria, yesterday, signed a seven-year ₦200 billion ($636 million) major loan deal with a consortium of twelve Nigerian banks to fund capital expenditure and working capital. The medium-term loan will help facilitate the company’s expansion plans, particularly the expansion of its operations into underserved parts of Nigeria such as villages and inner cities.
The 12 banks are Diamond Bank Plc, Fidelity Bank Plc, First Bank Nigeria Plc, Standard Chartered Bank Plc, Stanbic IBTC Bank Plc, Union Bank of Nigeria Plc, and Unity Bank of Nigeria Plc. Citibank Nigeria Limited, Ecobank Nigeria Plc, First City Monument Bank Plc, FSDH Merchant Bank Limited and Rand Merchant Bank Nigeria Limited were also part of the deal.
The seven-year facility will enable MTN expand its voice network and data service, the company said in a statement. It said the naira-denominated loan has a two-year moratorium and a five-year repayment plan. ‘’The investment indicates a gradual shift in focus from voice services to data services, something more indicative of where the telecommunications market is headed’’, said the company’s Chief Financial Officer, Adekunle Awobodu, during a private press briefing after the loan signing ceremony.
Awobodu said that despite much of the world having already moved to more data-focused telecommunications services, Nigeria is still in the nascent stages of the journey. The trend is clear, however. Fewer people now make voice calls and are more focused on data applications such as social networking and Internet-based mobile services. For the country to fully move into this era, massive capital investment is required. This is the logic behind MTN Nigeria’s move. The N200 billion fund will be poured into expanding MTN’s data network and improving its fibre infrastructure, invested in the expanding and improving MTN’s data network around Nigeria.
See Also: MTN Rated As The Best Mobile Data Provider in South Africa
The loan, Ferdi Moolman, CEO, MTN Nigeria says, will make “it possible for people to connect to each other and the world, find and share information and ideas, create and access new digital services and reimagine old services. This partnership puts in place infrastructure that empowers commerce, industry and the provision of public services.”
It is important to note that the telecoms company has positive prospects, especially with its recently-released result which shows an impressive performance. The Johannesburg-based company posted an increase in its subscriber base in Nigeria by 5.6% to hit 55.2 million, the highest in Africa.
The Group’s financial report also indicated that its Nigerian subsidiary performed ahead other markets and above expectations with double-digit growth. MTN, which has the largest market share in Nigeria with 55 million subscribers, is also planning a separate listing of its Nigerian business by the end of the year.
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