Ernest Azudialu

Why Smile Communications is going into voice – Ernest Azudialu

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Dr. Ernest Azudialu Obiejesi is the chairman of Smile Communications in Nigeria and a major shareholder in the Smile Holdings Limited; comprising, Smile South Africa, Smile Dubai, Smile Tanzania, Smile Uganda and Smile DR Congo. In Nigeria, Smile, a broadband operator, is operating on the 800 GHZ spectrum with 4G LTE licence. Last week, Smile announced that it had raised US$ 365 million to fund expansion of its 4G LTE network in the country. In the conversation below, Obiejesi sheds more light on the expansion bid, the fund-raise, shareholding structure and more. Excerpts:

Why a USD $365million fund-raise, in these days of currency instability?

The aim of this financing is mainly to finance to our growth; to accelerate our expansion drives, so that we will be able to build a robust network smiling around Africa. Due to the speed of the 4G LTE network it becomes very practicable that we should be able to have other networks spread across Nigeria very fast, such that we get the spectrum operating efficiently in Nigeria before other competitors catch up with us. Secondly, we promised Nigerians a network that will enable the growth and expansion of businesses. That is already happening both in Nigeria and the rest of Africa. So, we are consolidating.

Tell us about Smile’s equity holders.

Smile’s shareholders now comprise Al Nahla Group, a Saudi Arabia-based company, which is the majority shareholder; Renven Investment Holdings, a pan-African investment vehicle, in which Nigerian investors, including the Obijackson Group, are the majority; Verene, representing Smile senior management and social entrepreneurs from South Africa; Telecom Investments, a Saudi Arabia-based investment company; Capitalworks, an active alternative management company, specializing in investment in the African mid-market”; the PIC; and Smile employees.

So, we came together to compose the company called Smile. Nigeria is the largest telecoms market in Africa and that entails why Smile’s business in the country accounts for about 80% of the total operations. That is what makes Smile Nigeria very big and our participation in the country. Smile in other African countries are getting it and will grow big too.

The fund we secured is one of the biggest funds ever raised in the telecoms industry in Africa, especially with regards to a business that is somewhat a startup. Therefore, the management staff are happy with the feat we could achieve.

Is Smile adding voice to its business operations?

I have already mentioned we intend to expand the existing 4G LTE (mobile) broadband network in Nigeria and Sub-Saharan Africa. With the funds, we intend to complete our expansions to other countries. The more critical is Nigeria which is huge and for you to nurture such business to maturity you must spread out; cover all parts of the country.

The essence is for subscribers do witness continuity in the network coverage as they move from one part of the country to another. Secondly, we are preparing for Smile’s clear voice network )CVN(. We believe that before the end of this year we would roll out out our CVN. Therefore, apart from data, we can use Smile’s spectrum voice-wise. Some of these are the reasons we had to go into the fund raising.

Why voice, and why now?

This is where we have the population, growth tendencies, the businesses, and shows you that Nigeria is very large and sustainable for businesses too. Therefore, both in infrastructure deployment and the funds usage, it is expected that Nigeria will have a fair share. Other market will be sharing the remaining percentage. This simple analysis was part of the reasons the pan-African banks doled out the funds. They know Nigeria has the capacity to give back what is invested.

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