MTN’s grand exit plan out of the Middle East in progress

The South African network provider moves to focus on its pan-African market because of the US sanctions on Iran that restrains any organisation doing business with the country from doing business with the United States.

As a result, repatriating cash from its Iran joint venture has been very difficult, with the COVID-19 pandemic also contributing to its exit in the region.

MTN plans to sell this stake to TeleInvest, which holds the other 25%.

“MTN has resolved to simplify its portfolio and focus on its pan-African strategy and will, therefore, be exiting its Middle Eastern assets in an orderly manner over the medium term. As a first step, we are in advanced discussions to sell our 75% stake in MTN Syria.” – Group President and CEO, Rob Shuter.

Group President and CEO, Rob Shuter via Google Images

At the end of June, Middle East assets contributed less than 4% to the entire group EBITDA. MTN Syria contributed 0.7% to MTN’s reported EBITDA in the first half of 2020. The net assets attributable to MTN Syria in the MTN Group accounts have been written down to the estimated recoverable amount of US$80 million. Hence, the decision to shut down operations in Afghanistan, Yemen, and Syria. It also plans to withdraw its 49% minority shares in Irancell.

Divesting Snapp’s shares

MTN’s exit out of the Middle East will include the sale of its shares in Snapp, Iran’s topmost ride-hailing startup. According to the Group President and CEO, Rob Shuter, MTN will also be divesting its 43% stake in Snapp.

Ride-hailing app, Snapp via Google Images

With 1.5 million drivers operational in 34 cities in Iran, Snapp attained the milestone of 2 million rides a day after being in the business for only three years.

Focusing on the pan-African market

On Wednesday, July 15, MTN Nigeria, became the first mobile telecoms operator to introduce the eSIM (embedded SIM) service in Nigeria and indeed West Africa. The telco giant also announced that only 5000 subscribers can enjoy the service as it is still in the trial stage.