- March 9, 2018
- Posted by: Adrian Hall
- Category: More Africa News
Africa’s biggest mobile phone company is doing a spring clean of its empire. MTN Group said on Thursday it’s conducting a review to decide whether it really needs to be in all 22 of its markets across Africa and the Middle East. Some of them are tiny, others are war-torn while still more have regulators desperate to curb the Johannesburg-based company’s perceived dominance.
Here are a few countries where MTN is facing challenges, and some new ones that it could move into:
MTN is in a dispute with regulatory authorities in Benin on frequency fees, which it says are too high. “While we are fighting hard to stay in that market, economic sense needs to prevail,” chief financial officer Ralph Mupita said in an interview.
MTN received a US$6.6m fine from Cameroon’s telecommunications regulator and a one-year reduction in its licence term for allegedly not complying with spectrum and subscriber registration regulations. The company was also ordered to disconnect three million subscribers.
“It’s a big priority to resolve this in the near term,” Mupita said. “If it’s not resolvable, then it’s not resolvable. We want to find an amicable resolution to stay.”
Yemen, Syria, Afghanistan, South Sudan
MTN won’t invest in countries it classes as “conflict markets”, which means the local units have to be self-funding to stay in business. The company will take “appropriate action” if any of them are not cash-flow positive.
“If the markets are able to return to a non-conflict situation they could be attractive to us,” Mupita said. “Syria, for instance, was one of our top 10 markets not so long ago.”
While MTN is highly unlikely to leave its biggest market, the company has had run-ins with the regulator and was forced to pay a $1bn fine last year for missing a deadline to disconnect unregistered users.
The company expects double-digit Nigeria sales growth in the medium term, above an overall average of high single digits, as economic conditions improve and it gains subscribers from troubled competitors. As part of the fine settlement, the company agreed to list its local unit on the Nigerian Stock Exchange. Talks are also ongoing with the regulator to use spectrum gained from its acquisition of Visafone in 2016.
“Our strategy is to grow our network and we need all the spectrum we can,” said Mupita.
Iran is one of MTN’s top three markets but the company is struggling to repatriate cash that’s been stuck in the country for years due to former US-led and UK sanctions. The carrier has managed to repatriate about R6.5bn to date and is in talks with the central bank to move another R5bn later this year.
“They are prioritising foreign-exchange allocation to primary industries such as food goods at the moment,” said Mupita.
MTN has agreed to sell shares in its local unit to Ghanaian investors in exchange for a 4G licence.
“The primary objective is not to monetise, but to comply with regulatory requirements for the 4G licence,” said Mupita.
Angola plans to sell a minority stake in a state-owned telecoms provider and hold an auction for a fourth industry operator in 2018.
“We will certainly look at Angola and also Ethiopia if it opened up for a licence. There are a couple of countries in West Africa that we could look at, like Togo and Senegal,” the CFO said.
Source: Bloomberg LP (Via Tech Central)