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Lagos - The Nigerian arm of Africa's biggest mobile phone operator MTN Group [JSE:MTN] said on Friday it plans to invest $1bn over the next year to expand its network in the continent's most populous nation.
Cellphone operators are boosting capacity to defend market share in sub-Saharan Africa's second-biggest economy as increased competition changes the industry landscape.
On Thursday, Etisalat Nigeria said it had sealed a $650m syndicated loan agreement with eight local banks to expands its cellphone network.
"MTN Nigeria will spend $1bn capex on optimisation, building the fibre network, improving transmission capacity, building more base stations and substantially increasing the capacity of its network," said Funmilayo Omogbenigun, a spokesperson for MTN Nigeria.
MTN shares were about 2.5% up in Johannesburg.
MTN and Etisalat's main rivals in Nigeria - Africa's fastest growing telecoms market - are India's Bharti Airtel, and local firm Globacom.
Cellphone subscription in Nigeria has grown in leaps and bounds since the advent of GSM technology in 2001, but average revenue per user (Arpu) has been on a downward trend due to increased competition.
Bharti Airtel, the latest entrant into the market, acquired the African operations of Kuwait's Zain last June in a $9bn deal and has introduced tariff cuts leading to a price war across much of the continent.
Bharti aims to have 100 million subscribers and $5bn a year in revenue in Africa by 2012/13 and is likely to mount a serious challenge to MTN's position as market leader in Nigeria.
But Arpu, a key gauge of telecoms firms' competitiveness as well as consumer spending trends, is expected to decline to $5 from $8 over the next three years as the price war deepens.
MTN also signed loan agreements worth $2.15bn with 15 Nigerian and two foreign banks to fund expansion nine months ago.
"In Nigeria, demand still outstrips supply," Omogbenigun said.
Cellphone operators are boosting capacity to defend market share in sub-Saharan Africa's second-biggest economy as increased competition changes the industry landscape.
On Thursday, Etisalat Nigeria said it had sealed a $650m syndicated loan agreement with eight local banks to expands its cellphone network.
"MTN Nigeria will spend $1bn capex on optimisation, building the fibre network, improving transmission capacity, building more base stations and substantially increasing the capacity of its network," said Funmilayo Omogbenigun, a spokesperson for MTN Nigeria.
MTN shares were about 2.5% up in Johannesburg.
MTN and Etisalat's main rivals in Nigeria - Africa's fastest growing telecoms market - are India's Bharti Airtel, and local firm Globacom.
Cellphone subscription in Nigeria has grown in leaps and bounds since the advent of GSM technology in 2001, but average revenue per user (Arpu) has been on a downward trend due to increased competition.
Bharti Airtel, the latest entrant into the market, acquired the African operations of Kuwait's Zain last June in a $9bn deal and has introduced tariff cuts leading to a price war across much of the continent.
Bharti aims to have 100 million subscribers and $5bn a year in revenue in Africa by 2012/13 and is likely to mount a serious challenge to MTN's position as market leader in Nigeria.
But Arpu, a key gauge of telecoms firms' competitiveness as well as consumer spending trends, is expected to decline to $5 from $8 over the next three years as the price war deepens.
MTN also signed loan agreements worth $2.15bn with 15 Nigerian and two foreign banks to fund expansion nine months ago.
"In Nigeria, demand still outstrips supply," Omogbenigun said.
