Africa's number three mobile phone operator, Celtel, will inject an additional $1.4 billion into its Nigerian unit this year with a view to increasing its subscriber base, the company said on Monday.
Celtel, a unit of Kuwait's Mobile Telecommunications Company (MTC), acquired a 65 percent stake in Nigeria's number three operator Vmobile for $1 billion last May. "We are encouraged by what we have seen to play a long-term leading role in the Nigerian economy because of the good investment climate in the country," MTC Group CEO Sa'ad Al-Barrak said in a statement.
Celtel's total investment in Nigeria is expected to climb to $2.5 billion by the end of the year, he added. Fast-expanding MTC, awash with cash from an oil boom at home, splashed out $3.3 billion for Celtel in 2005 in a deal that flung African telecoms into the global investment spotlight.
Celtel hopes to overtake Nigeria's number two mobile operator local firm Globacom and challenge market leader MTN, a unit of South Africa's MTN Group for the top spot. Analysts say the Nigerian telecoms market is expected to become more competitive with the award this month of a fifth GSM licence to Abu Dhabi government investment agency Mubadala at a fee of $400 million.
"We are poised to make aggressive strides in Nigeria. We will fly, not run. We want to be a Nigerian operation, but with a global outlook in operation," Al-Barrak said. MTC Group hopes to increase its subscriber base to 70 million from 25 million in 20 countries by 2011.
The new strategy will see the MTC Group doubling its market capitalisation to $30 billion from $14.4 billion by 2011. Its earnings are projected to rise to $6 billion from $2.93 billion posted in the nine months to September 30, 2006, the statement said. MTC now operates in 14 African countries through Celtel, with 16 million subscribers. It also has operations in Kuwait, Iraq, Jordan, Lebanon and Bahrain.
Nigeria, Africa's most populous country, is the continent's fastest-growing telecoms market, attracting investments of over $10 billion in five years. The number of telephone users in Africa's top oil producer has risen to more than 20 million, most of them mobile users, from about 500,000 in 2001, when the Global System Mobile Communication (GSM) technology was introduced in the country.
With a population of about 140 million people and a telecoms market penetration among the lowest in the world, experts say Nigeria's potential for further growth is enormous.