The recent announcement that MTN’s Syrian business was placed under judicial guardianship following accusations that it breached its licence conditions, is one of a string of problems Africa’s largest mobile operator is trying to put behind it through its asset sale programme and decision to leave the Middle East and focus on Africa.
MTN had already announced the pending $65m sale of its 75% stake in MTN Syria before its latest troubles there. It also plans to sell its operations in countries including Afghanistan (where it was accused of bribery and violation of the Anti-Terrorism Act in the US) and Iran (where it was charged with bribery and has been unable to extract cash due to US sanctions).
The Middle East region, once a major focus of MTN’s daring and expansive global growth strategy, contributes marginally to group revenue and profits, seemingly making it more trouble than it is worth.
MTN’s experience in several African countries has not been much easier. It has encountered numerous problems in Nigeria, including a massive $5.2bn fine, which was subsequently reduced to $1.5bn. Nigeria, contributing a third of revenue and nearly 40% of profits, is most certainly worth the trouble, and MTN has been working on its relationship with Nigerian authorities and listed its Nigerian operations on the local exchange.
The group’s last few years have been focused on dousing fires in various geographies, turning around its South African business and acting on what it calls its asset realisation strategy, first announced in March 2019, to reduce debt and risk. Group earnings have gradually improved as it has tackled these issues.
This story is from the 18 March 2021 edition of Finweek English.
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This story is from the 18 March 2021 edition of Finweek English.
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