LTE for the Democratic Republic of Congo
The crowded telecoms sector is to get some fresh blood with the announcement in September that Mauritius-based Smile Telecoms is to enter the market in early 2016.
The firm secured some $365m in investment capital through debt and equity financing and plans to roll out a 4G LTE mobile broadband network across the country as well as boost its existing services in Nigeria, Tanzania and Uganda.
“Deploying a high-speed, ultra-fast and reliable internet in the country will help companies and people to become more productive and efficient, and this is in itself an element of economic development,” says Paul Kasseyet, president of Smile Telecoms in the DRC. Smile plans to begin operations of its LTE network in the DRC in early 2016.
LTE (Long-Term Evolution) is a fourth-generation wireless internet technology that provides internet speeds up to 10 times faster than those offered by 3G networks. It provides high-quality voice, data and video streaming. Download speeds can peak at up to 1GB per second.
To raise the funds, Smile sold a $50m equity stake to South Africa’s Public Investment Corporation, a state-run group managing a R1.6trn ($116bn) investment pot, and borrowed from a group of investors including the African Export-Import Bank and Standard Chartered Bank.
The move will throw the company, which is majority owned by the Saudi group AlNahla, into the fiercely competitive DRC communications sector, pitting it against MTN, Airtel, Telefonica and Orange. Cyprus-based Yozma Timeturns became the country’s sixth mobile operator when it launched its network in November of last year.
Since its foundation in 2007, Smile Telecoms has raised more than $600m in investment and says it is seeking to target some 300 million customers across Nigeria, Tanzania, Uganda and the DRC.
In the DRC, internet penetration rates are around 2.5%, but the rise of low-cost smartphones is confirming the key role of data instead of voice in future revenue growth for telecoms firms.
The penetration rate for mobile phones hit 49% in the first trimester of this year but the average revenue per user per month was just $2.5.