By Our Reporter
Smile Telecoms Holdings which operates mobile wireless broadband networks in Nigeria, Tanzania and Uganda has announced that it raised US$ 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 operation.
Smile will also launch its broadband network in the Democratic Republic of Congo (DRC) early in 2016.
The funding is comprised of US$ 50 million of equity, raised from the Public Investment Corporation on behalf of Government Employees Pension Fund (PIC). The remaining US$ 315 million multi-tranche, multi-jurisdictional debt facility was 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 specializing in investment in the African mid-market; the PIC; and Smile employees.
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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 US$ 600 million.
Smile Telecom’s CEO Irene Charnley 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.
