MTN Rwanda borrows $56.9m from local banks to boost operations
Telecom giant MTN Rwanda has acquired a Rwf50 billion (about 56.9 million US dollars) loan from eight local commercial banks in a bid to expand and modernize its network and related IT systems in the East African country.
MTN acquired the loan, which has a seven-year tenure, from Ecobank Rwanda, Cogebanque, BPR Atlas Mara, I&M Rwanda, Bank of Kigali, KCB Rwanda, Equity Bank, and GT Trust Bank.
MTN Rwanda Chief Financial Officer Diatile Lily Zondo is quoted by New Times, a Rwanda daily, that the funds will also go into covering operating costs which have been going up over the years as the firm increases services portfolio.
“The loan is designed to fast-track expansion of our network to accommodate growing subscriber numbers and services,” Zondo is quoted as saying.
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New Times adds that the key network operating costs are rentals of masts (operated by IHS), transmission costs, and maintenance.
MTN Rwanda Chief Executive Officer Bart Hofker is quoted as saying that the company seeks to leverage rising customer demand by providing better solutions.
The upgrade comes at a time when MTN has been on the receiving end of multiple customer complaints in service delivery such as network failures, data irregularities among others.
Ecobank Rwanda Managing Director Alice Kilonzo is also quoted as saying the loans was oversubscribed by 127 percent with the eight financiers committing about Rwf63.3 billion.
In the event of an oversubscription in a syndicate, the agents of the facility allocate the rest of the participating banks a portion of the loan.