South African telecoms giant set to sell subsidiary MTN Syria to Saudi TeleInvest.
Focus on Africa
The talks are well advanced, a revelation made on Thursday by the CEO of the group, Robert Shuter, who is aiming for a new pan-African strategy, a refocus on Africa, MTN being present in 14 distinct markets.
CEO Rob Shuter mentioned in his statement the strong results achieved during the COVID-19 period, highlighting the excellent performances of Nigeria, Ghana and South Africa.
While in the first quarter of 2020, the group recorded a turnover increase of 9.4%, or more than 4.5 billion dollars, the activities in the Middle East benefited only to the extent a meager 4%.
The company, founded in 1994, has operations in Sudan, Syria, Yemen and – as well as Iran and Afghanistan in its Middle East file. The first step towards its new entrepreneurial orientation is the sale of its 75% stake in MTN Syria. A key business about which the company is already in advanced talks.
Reasons for MTN’s withdrawal from the Middle East
Losses from falling regional currencies, geopolitical volatility in the Middle East, and Western sanctions issues are among the reasons for the group’s decision.
Although Robert Shuter did not specifically mention Iran, MTN’s entry into the region was marred by allegations, which it denied, that it was granted a 15-year operating license in Iran. through bribes, and allegedly also helped militant groups in Afghanistan.
The company’s assets in the Middle East contributed less than 4% to group profit before interest, taxes and depreciation during the first half of the year ended June 30.
In recent months, MTN had made several adjustments in its investment agenda, due to the coronavirus pandemic. A fund of $ 2.1 million had been launched internally. It aimed to come to the aid of staff in difficulty.
And in line with this post-covid strategy, MTN is closely monitoring its entry into the Ethiopian market where it should apply for a license. With 105 million inhabitants, Ethiopia is preparing to open up its telecommunications sector, so far tightly controlled by the state, to foreign capital.
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