Kuwait's Mobile Telecommunications Company (MTC) plans to invest $10.5 billion through its Celtel subsidiary this year to expand cellphone operations in Africa, the company said yesterday.
MTC, the fourth-largest Arab telecom company by market value, operates in 14 African countries through Celtel, which is the continent's third-largest mobile operator.
It will be the biggest single investment by a mobile service provider to improve and expand its network in Africa, the company said.
"We have embarked on an issue of becoming a global company, hence we have to double our coverage by investing in latest technology," MTC MD Saad al-Barrak said in a statement.
MTC said in January it would embark on an expansion programme aimed at raising its subscriber base to 70 million, from 25 million, in 20 countries by 2011.
MTC Group said it would double its market capitalisation to $30 billion from $14.4 billion in the next four years.
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.
The company, which is 24.6%-owned by the Kuwaiti government, posted a 64% rise in net profit to $1.056 billion in the year to 31 December 2006, according to its financial results released on Sunday.
Serious challenges
The company's Nigerian unit was the main driver of the record growth, MTC said. Celtel acquired 65% of Nigeria's third largest cellular network, Vmobile, for $1 billion in May.
MTC said last month it would invest another $1.4 billion in the operation to take its total investment in Nigeria to $2.5 billion by the end of the year.
Celtel also has operations in Zambia, Kenya, Uganda, Niger, Tanzania and the Democratic Republic of Congo, among other African countries, and is considering bidding for a stake in state-run Algerie Telecom.
It also has operations in Kuwait, Iraq, Jordan, Lebanon and Bahrain.
"Celtel is currently facing a serious challenge in Africa from Mobile Telecommunications Network of SA [MTN Group]," the statement said.
Johannesburg-based MTN is Africa's largest mobile network, while SA's Vodacom, held jointly by Africa's biggest telecoms company Telkom and Britain's Vodafone, is number two.
With low mobile phone penetration, the number of African subscribers grew 66% in 2005 to 135 million users, compared with growth of just 11% in western Europe during the same period.
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