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MTN, 12 banks seal N200bn loan agreement

MTN, 12 banks seal N200bn loan agreement

Moves by MTN Nigeria to deepen its service offerings in the country yesterday received a boost as the telecoms giant secured a N200 billion medium-term loan from 12 lenders.

The facility, which is structured with a two-year moratorium and a repayment plan of five years, would be provided by a syndicate of banks made up of Citibank Nigeria, Diamond Bank, Ecobank, Fidelity Bank Plc. First Bank and First City Monument Bank (FCMB). Others are FSDH Merchant Bank, Rand Merchant Bank, Standard Chartered Bank, Stanbic IBTC, UBA and Union Bank.

With data now becoming major source of revenue for mobile number operators, recent investments by the telcos have been towards strengthening their data infrastructure. The MTN loan is also to be deployed for the same purpose.

Besides, persistent dip in voice revenue due to the impacts of over the top services (OTTs) such as WhatsApp, Facebook and Skype, among others, is forcing the operators to invest more in deepening their data offerings.
Just recently, Globacom signed expansion agreement with two global vendors, ZTE and Huawei, at the cost of $500 million and $750 million respectively.

Airtel also recently announced plans to upgrade and expand its network, which is being carried out by Ericsson.

These investments are expected to help Nigeria deepen broadband penetration, which currently stands at 22 per cent.
Meanwhile, MTN, which currently controls over 40 per cent of Nigeria’s telecoms market with 66.4 million active customers as at June, will be extending its domination further through the new expansion plans.

Speaking at the signing of the loan agreement yesterday, Chairman, MTN Nigeria, Pascal Dozie, said the firm has been in the country for 17 years and the experience has been great with different innovations from the company.

Dozie, who was represented by Akin Oyebode, stated that MTN wouldn’t have been what it is today if not for the support of the banks, adding that even with pressures the banks face in terms of credit, the company still have their support.

“This is commendable,” he said.

Chief Executive Officer, MTN Nigeria, Ferdi Moolman, expressed enthusiasm at the completion of the agreement, saying it signposts MTN’s commitment to and confidence in Nigeria and the strength of the strategic collaboration between MTN Nigeria and local financial institutions, that will help deepen and broaden the provision of ICT services in Nigeria.

“The signing of this loan facility is a major landmark in our expansion programme in which we are making significant investments. The facility will enable us evolve the network to deliver convergent and superior quality, drive voice capacity expansion and data service penetration, maintain optimal capital structure and funding level that support growth and expansion.

“This partnership puts in place infrastructure that empowers commerce, industry and provision of public services,” Moolman said.
He lauded the participating financial institutions for staying committed to MTN, stressing that the loan syndication showcased the strength of the Nigerian financial institutions and their confidence in MTN’s visions, as well as both parties’ joint ability to stimulate significant economic growth.

Also Executive Director, Corporate Banking of First Bank, Mr. Remi Oni, said that the signing ceremony showed the conclusion of a thoughtful journey for every bank that was involved.
“The sum committed shows the value of the services of MTN and First Bank is committed to supporting its business,” Oni said.

“Everybody that has come into this loan facility deal is excited, because it is a deal that will impact the public.”

Mr. Emeka Okonkwo, Executive Director, Union Bank, said the bank’s partnership with MTN was more than just rendering financial services.

According to Okonkwo, looking back to where MTN is coming from, there is the need to appreciate the impact MTN has made in the industry.

“As the industry revolves, MTN will play a crucial part and that is why we are going into this partnership with them,” he said.

Mr. Adekunle Awobodu, Chief Financial Officer, Finance Division of MTN, said Nigeria’s journey from voice to data required capital investment and, as such, the loan would be tailored towards that.

“This movement requires expensive capital investment, which the loan facility will aid. It will equally help the modernisation of the network to position it well.
“The country also wants to expand its broadband penetration and the loan facility providing the needed equipment will see to that,” he said.

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