Johannesburg — MTN has negotiated one of Africa's largest-ever loans, wheedling $2bn out of the banks to expand its network in Nigeria.

The loans arranged by Standard Bank will be used to improve a network that is groaning under the weight of 14- million customers.

The five-year medium-term debt facility would give MTN Nigeria the capital to grow market share and improve coverage, the companies said yesterday.

When CEO Phuthuma Nhleko announced MTN's financial results in August, he said capex of R5,5bn had been earmarked for Nigeria in the next six months after it was "caught out" by network overload.

Subscriber growth had surged 14% since December but had begun to slow as congestion was damaging the quality of its service. "Our challenge isn't demand," Nhleko said, "the constraint is meeting that demand by being able to roll out networks as fast as we can."

MTN originally aimed to raise debts of $1,2bn, with $840m coming from Nigerian lenders and $360m from foreigners. But the syndication was subscribed by more than 200% as commercial banks showed an appetite to get involved.

The new amount of $2bn is made up of $1,6bn in local cash and $400m in foreign currencies.

MTN Nigeria is rolling out a national fibreoptic network that will be one of the largest in Africa, designed to provide a dramatic boost to the quality of service.

"Over the years we have demonstrated our confidence in the Nigerian market through infrastructure investment, spending over R3,6bn in capital expenditure in 2006," Nhleko said.

Standard Bank director Heloise Smith said she was particularly pleased to have raised loans of this size in the prevailing market conditions.