MTN exits two African markets
Africa’s telecommunications giant, MTN, has struck a share purchase deal with Telecel, an Africa-focused telecommunications service provider, to acquire MTN’s equity stakes in MTN Guinea-Bissau and MTN Guinea-Conakry.
The agreement was reached in December 2023 and is subject to several conditions precedent, according to the statement in MTN’s financial report for the year 2023.
MTN says Telecel, an established telecoms operator with a significant presence in Africa, is well-positioned to drive the growth and further development of these operations and contribute to technological and economic progress in these markets.
“As we advance through this transition, MTN is focused on ensuring a smooth and seamless transition for our customers, employees and all other stakeholders,” the financials read in part.
The value of the sale remains undisclosed; however, MTN says further updates regarding this transaction will be provided as appropriate.
MTN hinted at its potential exit from Guinea-Bissau, Guinea-Conakry and Liberia, as reflected in its financial reports, which revealed numerous challenges across the West and Central Africa region. CEO Ralph Mupita pointed to signs of inflation and currency devaluation across several markets.
Across these countries, MTN controls a secondary chunk of the market share, about 30% in Guinea-Bissau and Guinea-Conakry.
In Guinea-Bissau, MTN experienced financial difficulties following a breach of loan covenant due to negative EBITDA performance. MTN reported a loss of R1.69 billion ($89,392,809) in its annual report.
The new exit development will enable MTN to prioritize its operations in stronger markets such as Ghana, Cameroon, Nigeria and Cote d’Ivoire in the West and Central Africa region.
Collectively, these markets contribute 18.6% to the group’s revenue, compared to other West and Central African (WECA) countries, which contribute 7.3% to the firm’s overall revenue.
In the company’s audited financial results for the year ended 31 December 2023 in Nigeria, it witnessed a very challenging operating environment characterised by rising inflation, currency devaluation and foreign exchange shortages.
Outside of Africa, MTN has also divested 100% of its shares in MTN Afghanistan to Investcom AF and has entered into a six-month transitional services agreement.
