Smile secures R5.1bn for expansion

Smile Telecoms Holdings – the operator that offers mobile wireless 4G LTE broadband networks – has raised $365 million (R5.1 billion) of funding to help fuel its expansion in the Democratic Republic of Congo, Nigeria, Tanzania and Uganda. By Gugu Lourie

One of Africa’s best kept-secret telecoms firms, Smile Telecoms based in Johannesburg has received a $365 million (R5.1 billion) cash injection from South Africa’s biggest pension fund manager, the Public Investment Corporation (PIC), and African Export-Import bank – a Cairo-based pan-African financial institution.

The money will be used to expand the company’s mobile wireless 4G LTE broadband networks across Nigeria, the Democratic Republic of Congo, Tanzania and Uganda. Smile Telecoms is targeting close to 300 million customers.

LTE allows for the more effective use of frequency spectrum, more product innovation, stable and reliable services at higher data speeds. It also improves coverage while providing operational cost-efficiencies.

It is the first standard, which lives up to the promise of high-speed broadband services.

Irene Charnely, CEO of Smile Telecoms

Smile Telecoms was founded in 2007.

Five years later, in 2012, it launched Africa’s first 4G LTE commercial network in the 800MHz band 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 Telecoms is smiling – founder of the business and current CEO, Irene Charnely – a former MTN executive – says the reason “we are smiling” is that the “funds will help us to accelerate our 4G LTE network expansion into all our operations”.

Charnely adds: “We can now put in place a national infrastructure that is comparable to a larger 3G network.”

The funding will consist of $50 million (R696 million) of equity from the PIC, a South Africa state-owned pension fund manager. It also include a $315 million (R4.3 billion) from 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.

Charnely said the equity and debt funding would enable Smile Telecoms to deliver true wireless mobile broadband to customers for the first time.

The company is planning to spend the most of its windfall in Nigeria, Africa’s biggest economy and most populous country.

The telco has a network and service licence in South Africa, but is awaiting the allocation of spectrum before it can offer its 4G LTE services in the country.

The cash injection will also enable the PIC to be a shareholder in the business.

The company’s biggest shareholder is Saudi Arabia-based firm Al Nahla and other shareholders includes Renven Investment Holdings, a pan-African investment vehicle, in which Nigerian investors, including the Obijackson Group, are the majority shareholders; Verene, representing Smile senior management and social entrepreneurs from South Africa; Saudi-Arabian-based Telecom Investments, Capitalworks, the and Smile employees.

It is left to be seen if the equity and debt cash injection in the business is a long-term step preparing Smile Telecoms for a future listing in both the JSE and Mauritius Stock Exchange.



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