MTN pays for AU chief ’s Ethiopia furniture
Company woos officials in bid to penetrate new markets
CELLPHONE giant MTN, having barely extricated itself from claims of bribery and political interference in Iran, is now lavishing gifts on politicians.
The largest company with a primary listing in South Africa, MTN has admitted that it furnished the Ethiopian home of the new African Union head, Nkosazana Dlamini-Zuma.
MTN CEO of corporate affairs Paul Norman said the company decided to buy the furniture for the AU house in Addis Ababa because the place had not been refurbished in more than a decade.
“MTN also heeded the call of the South African government for South Africans to support the new AU Commission chair . . . with furnishings,” he said.
“Her historic election is a major success for South African foreign policy. She is the first woman in the 50 years of this
The company has been linked to politicians in markets it entered elsewhere in Africa, including former Liberian president Charles Taylor
continental organisation to occupy this position.”
At the time of MTN’s Iran deal, Dlamini-Zuma was South Africa’s foreign minister.
Ethiopia is the third-largest country in Africa with an estimated population of 82 million, but it has only 16.8 million cellphone subscribers and a mobile penetration rate of 18.9%.
However, the use of internet services such as Skype and Google Talk are illegal.
MTN, the biggest cellular provider in Africa, has been struggling to clinch big deals in emerging markets, especially after the help that it had received from the Thabo Mbeki administration began to dwindle.
Frost & Sullivan analyst Masego Mbaakanyi said political relationships were important for successful bidding.
MTN is under pressure. The growth in subscriber numbers has fallen from 48% in 2008 to just 15.1% last year. The company expects to add 21 million subscribers from existing markets this year.
After failed talks with Bharti Airtel and Reliance Communications, which would have helped it to break into Indian markets, the operator missed another big opportunity this week when it failed to win one of the mobile licences in Myanmar. They went to Norway’s Telenor Mobile Communications and Qatar’s Ooredoo, according to a Facebook post by Ye Htut, spokesman for Myanmar’s President Thein Sein.
Ye said a joint venture led by France Telecom-Orange and Murubeni Corporation was selected as the back-up operator in case one of the two winners did not fulfil requirements.
MTN lost out in spite of a partnership with Amara Communications, a subsidiary of IGE, which is controlled by the sons of Aung Thang, a wealthy businessman who served as Myanmar’s industry minister and is one of the secretaries of the ruling party.
Thein has taken a hard line against cronyism and corruption. The crackdown has reportedly led to the country’s former minister of telecommunications and information resigning amid an investigation against him and other officials.
MTN has been linked to politicians in markets it entered elsewhere in Africa, including former Liberian president Charles Taylor and his friend Emmanuel Shaw. Both are being prosecuted for war crimes.
In Ivory Coast, MTN reportedly provided assistance to Laurent Gbagbo, who was ousted from the presidency in the country’s civil war.
MTN said it would continue exploring opportunities in developing countries. “MTN still considers Myanmar an attractive market,” said a spokesman.
Its CEO, Sifiso Dabengwa, said in a call with analysts earlier this year that the group would be “comfortable with a debt of anywhere between $4-billion and $8-billion” to pursue opportunities. This is well within the price range analysts said would be needed to construct telecommunications lines in the southeast-Asian country.
Deloitte said this year that Myanmar, which has less than 10% mobile penetration, needed thousands of kilometres of fibre infrastructure and more than 15 000 towers by 2015 to achieve the targets. “The estimated cost of this network infrastructure investment stands at $4-billion,” said the analysts.
MTN had R5.5-billion in cash reserves by December.