Mobile network operator (MNO), Netone is set to secure a loan worth $71 million from Chinese state financial institution, China Exim Bank,. The loan is meant to upgrade its existing infrastructure, particularly base stations and increase base stations by expanding to areas which have poor connectivity. Speaking about the loan facility, NetOne chief executive Mr. Lazurus Muchenje said;
We are talking and we will soon receive a purse of $71 million. The funds will be put in the construction and upgrading of base stations around the country……We have areas that were having poor connectivity and we are now moving there to connect them to Zimbabwe and the world.
China Exim Bank is proving to be a reliable financier for Netone after it advanced $60 million back in 2011 for mobile broadband services infrastructure. Not only is China Exim Bank is known to finance Netone but even Harare City Council and the government have been bailed out by this state-owned Chinese bank. The loan also comes after, Netone also signed a $71 million deal with Huawei earlier this year (another Chinese company).
The loan facility is likely to be disproportionately channeled to increase the in-demand LTE (4G) base stations on which it currently lags relative to its fierce competitor, Econet. LTE has become the in-thing in mobile telecommunication in Zimbabwe and around the world owing to its ability to offer high-speed. Netone 288 4G base stations is dwarfed by Econet’s 634 4G base stations.
The increase of LTE base stations and 2G base stations (most likely in rural areas) will increase competition among the MNO’s and emit positive externalities to customers characterized by increased internet speeds and reduced prices.