MTN Nigeria gets US$1B cash injection

Mergers, Acquisitions and Financial Results

Pan-African giant MTN has become the latest operator to inject cash into its subsidiary in Nigeria, Africa’s largest mobile market. South African-based MTN plans to invest US$1 billion in its market-leading Nigerian network over the next year to meet rising capacity demands and protect against increasing competition, reports Reuters. "MTN Nigeria will spend US$1 billion capex on optimisation, building the fibre network, improving transmission capacity, building more base stations and substantially increasing the capacity of its network," said Funmilayo Omogbenigun, a spokeswoman for MTN Nigeria. MTN shares were up around 2.5 percent in Johannesburg in response to the news.

One of MTN’s main rivals in the country, Etisalat Nigeria, announced too (see below the briefs) that it has secured US$650 million in loans from eight local banks to expand its 2G and 3G networks in the country. MTN also signed loan agreements worth US$2.15 billion with 15 Nigerian and two foreign banks to fund expansion nine months ago, notes Reuters. According to Wireless Intelligence data, MTN is Nigeria’s largest mobile operator with 38.7 million connections in Q4 2010, while Etisalat is the fourth largest on 6.8 million. Both face competition from second-placed Glo Mobile (19.6 million) and third-placed Bharti Airtel (15.8 million), the latter entering the market last year via its acquisition of Zain’s African assets. According to Reuters, Bharti aims to have 100 million subscribers and US$5 billion a year in revenue in Africa by 2012/13 and is likely to mount a serious challenge to MTN's position as the African market leader.