MTN expected to shed Liberia
MTN Group’s sale of its Cyprus unit is just the start of a broader exit from small or problematic markets, with the Liberian unit leading a number of West African divisions being considered for disposal, according to people familiar with the matter.
MTN Group’s sale of its Cyprus unit is just the start of a broader exit from small or problematic markets, with the Liberian unit leading a number of West African divisions being considered for disposal, according to people familiar with the matter.
Africa’s largest mobile phone company by subscribers sees the Liberia, Guinea and GuineaBissau businesses as ones it could do without, said two of the people, who asked not to be identified as the information is not public.
BUSINESS REVIEW
The review is being led by CEO Rob Shuter, who said in March he planned to evaluate whether the Johannesburg-based company needed a presence in all 22 markets in which it operates.
An MTN spokesman would not comment on market speculation on Wednesday.
MTN announced the sale of its Cyprus unit to French billionaire Xavier Niel’s Monaco Telecom on Monday for about €260m, the first country exit in the company’s 24-year history.
Cyprus had the lowest number of subscribers of all MTN’s markets as of the end of March, though Liberia and GuineaBissau were close.
The only other country division with fewer than 1-million customers is South Sudan, which has been engulfed in a civil war since 2013.
The sale of smaller markets could be laying the groundwork for an attempt to break into Angola, one of the people said. Africa’s number two crude producer plans to sell a minority stake in state-owned telecommunications provider Angola Telecom and hold an auction for a fourth industry operator.
ETHIOPIAN OPPORTUNITY
Meanwhile Ethiopia, Africa’s most populous nation after Nigeria, is planning to sell parts of its state-owned telecommunications company to foreign investors, opening the door to a market long coveted by MTN and rival Vodacom Group.
MTN has struggled with regulators and governments across the continent in recent years, increasing the strain in certain markets.
In Benin, the carrier agreed to pay 70-billion CFA francs ($125m) in May to settle a dispute over frequency fees and in order to secure a five-year licence extension.
The telecom company also had to hammer out terms for a new licence in Cameroon, after agreeing to a $6.6m penalty.
All that pales in comparison to MTN’s woes in Nigeria, where it was forced to pay a $1bn fine in 2016 for missing a deadline to disconnect unregistered users amid a security crackdown.
However, the carrier has repeatedly stated a commitment to its biggest market and that is unlikely to change, the people familiar with the situation said.
Liberia has struggled to revive its economy after a yearlong Ebola outbreak earlier in the decade killed thousands and isolated the country.
GDP contracted by 1.6% in 2016, according to World Bank data.
Liberia President George Weah, who took office in January, this week pledged to pursue “aggressive” monetary and fiscal policies as inflation soars and the Liberian dollar slumps.
CYPRUS HAD THE LOWEST NUMBER OF SUBSCRIBERS OF ALL MTN’S MARKETS AS OF THE END OF MARCH