Smile raises $365M for Africa LTE expansion, plans DR Congo launch in 2016

Smile Telecoms raised $365 million (€326 million) to expand its existing LTE networks and services in Africa, and said it plans to launch services in the Democratic Republic of Congo (DRC) early in 2016.

The company said the funding is one of the largest capital raises ever for a telecoms operator in Africa and brings the total funding committed to Smile since its founding in 2007 to about $600 million.

Initially established as a WiMAX company, Smile now operates LTE broadband networks in the 800 MHz band in Nigeria, Tanzania and Uganda. Smile COO Tom Allen said at the AfricaCom conference and exhibition last year that DRC would be the next target country.

The funding will be used to expand Smile's existing networks and services, so that its national coverage would be comparable to the largest 3G network in each of its current countries of operation. The primary areas of investment will be to build a full MPLS (multiprotocol label switching) network, establish a London point of presence and expand international backhaul services, and to fund operational expenditure and working capital. Ericsson and Alcatel-Lucent are the key network equipment providers for the operator.

Smile offers dongle-based data-only services now, but plans to offer voice over LTE (VoLTE) services before the end of this year. Previous reports have suggested that VoLTE could be launched in Uganda initially.

According to Allen, who spoke to FierceWireless:Europe earlier this year, spectrum remains the biggest hurdle for the company's LTE rollouts. So far, Smile has launched services where it has been able to get hold of 800 MHz spectrum.

Sheikh Mohammed Sharbatly, deputy chairman of Smile, said the governments of Nigeria, Tanzania, Uganda and the DRC are to be commended for licensing 800 MHz spectrum for commercial use at an early stage relative to many other countries.

He said the markets "have each demonstrated commitment to be at the forefront of the broadband revolution and to accelerate development and GDP growth."

Earlier this year, Allen also said backhaul costs in Africa are starting to come down. "The cost of backhaul and international links are falling very fast as more capacity comes to market," he said. "One challenge has been getting the level of quality we need; some of the fibre around in Africa is suspect and does not deliver the quality and reliability we need."

For more:
- see this Smile release

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