African mobile operator Smile on Tuesday raised US$365 million, which it will spend on extending 4G coverage nationwide in markets where it already offers 4G.
Smile launched 4G in Tanzania in June 2012, followed by Nigeria in February 2013 and Uganda in June 2013. It plans to launch 4G in the Democratic Republic of Congo (DRC) early next year. In all four cases, the company is using 800-MHz spectrum.
"By licensing 800-MHz 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," said Mohammed Sharbatly, deputy chairman of Smile, in a statement.
Smile said the funds will enable it to reach nationwide coverage in Tanzania, Nigeria and Uganda by the end of 2015.
More specifically, Smile said it will spend the money on network equipment and services provided by Alcatel-Lucent and Ericsson. It will also build an MPLS network, a new point of presence (PoP) in London, and expand its international backhaul capacity. The funds will also contribute to operational expenditure and working capital.
"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," said Smile CEO Iren e Charnley.
Smile said the funding is one of the largest ever capital increases for an African telco, and brings the total funding committed to Smile since its 2007 founding to approximately $600 million.
The funds consist of $50 million worth of equity sold to South Africa’s Public Investment Corporation (PIC), and a $315 million debt facility led by Egypt-based African Export-Import Bank, with participation by the Development Bank of Southern Africa, Diamond Bank, Ecobank Nigeria, the aforementioned PIC, the Industrial Development Corporation of South Africa, and Standard Chartered Bank.
