Telecom giant to roll out optic cable countrywide, to build state-of-the-art headquarters in Kampala
On March 4, MTN CEO Brian Gouldie told journalists at a press briefing that the company was going to invest Shs 238 billion in its network in Uganda in 2016. On May 26 – exactly three months later – Gouldie sat with executives from four top banks in Uganda at another press briefing to announce that they had secured a loan of $114 million (about Shs 380 billion).
The cash is to be used to implement projects involving the expansion of its 3G, 4G networks as well as its fibre optic cable network. It’s a big statement of intent in a market characterized with stiff competition but low investment.
The funding, secured from four local commercial banks – Stanbic Bank, Citi Bank, Standard Chartered Bank and Barclays Bank – as a syndicated loan, will also be used to start on the construction of their multi-billion headquarters at the former British American Tobacco offices on Jinja Road in the heart of Kampala City.The company actually plans to invest Shs 283.3 billion this year and Shs 299 billion in 2017.
Gouldie said the investment is inevitable in a market where consumers are demanding both quality voice and data products, which makes it necessary to embark on aggressive rolling out of high speed data capacity countrywide.
“Our subscribers have discovered that they can enjoy value for money while experiencing MTN’s quality of service,” Gouldie said. “And in order to ensure that we offer enhanced quality, we are continuously building our network capacity in line with our optimistic forecasts of demand as we also guard our market share from impending competition.”
Gouldie added that the execution of the infrastructural development projects would enhance its competitive edge in the market and also strengthen the country’s economic growth and development agenda. This is the second time that MTN is securing a syndicated loan to finance its development plans in the country.
A few years ago, MTN secured a $100 million (Shs 333.9 billion) facility that was arranged by ABSA Capital, the investment banking division of ABSA Bank Limited as a sole global coordinator together with Barclays, KCB, Standard Chartered and Stanbic Bank. The loan was fully paid off within the five-year loan period.
In their investment strategy, MTN plans to increase its 3G and 4G network sites and expand the roll out of fibre optic cable from the current 3,500 Kilometres to 4,200 kilometers across the country. At the moment, MTN has some 75 4G sites, 591 3G sites, and 1,492 2G sites.
Patrick Mweheirwe, the Stanbic Bank CEO, said the successful execution of the five-year credit facility is a testament to the market’s confidence inMTN and its plans to improve the country’s communication industry.