Africa’s largest mobile operator MTN plans to leave Afghanistan by the end of the year with its exit from the west Asian country in the “regulatory approval stages”.
The move is part of the group’s plans to withdraw from the Middle East region, including Syria, Yemen and Iran, as part of a five-year slim-down plan unveiled in 2019 to reduce risk, sell noncore assets such as towers and masts, and raise about R25bn.
The Yemen and Syria businesses were sold in 2021. Just Iran will remain in the group’s regional portfolio once it sells its shareholding in Afghanistan to Investcom, an affiliate company of Singaporean telecom company M1.
Afghanistan accounted for 2% of all MTN subscribers, according to the group’s latest figures.
“Discussions are also ongoing regarding the potential orderly exit of three of our smaller operations in West Africa — MTN Guinea-Bissau, MTN Guinea-Conakry and MTN Liberia — and we will continue to update our stakeholders, as appropriate, on material developments in this regard,” the company, valued at about R180bn on the JSE, said on Tuesday in an update for the three months to end-September.
While slimming down, the group is nonetheless open to expansion opportunities. It attempted an entry into Ethiopia’s recently liberalised telecom market, but chose not move further after losing a licence bid to rival Vodacom and its affiliate Safaricom.
Mastercard deal
MTN also said it making progress in finalising a deal with Mastercard, which is set to take up a minority stake in the group’s $100bn fintech business.
Concluding the agreements with Mastercard is a focus in the current quarter, the group said.
MTN, founded with the help of the government in 1994, is a powerhouse in the emerging markets of the Middle East and Africa, but it has had run-ins with regulators, competitors and rights groups.
In the most recent quarter, group service revenue, which excludes device and SIM card revenue, rose 9% year on year to R156.3bn, helped by a 15.3% jump in data revenue, though voice revenue retreated 0.6%.
Data revenue includes mobile and fixed access data, but excludes roaming and wholesale.
The group’s total subscribers grew 1.8% to 290.1-million customers across 19 countries and active data subscribers rose 6.7% to 144.6-million.
Core earnings (ebitda) was up 11.2% on a constant currency basis, but the margin was 2.5 percentage points lower at 42.8% due to cost inflation, forex depreciation, network-related costs in SA and the effect of the conflict in Sudan.
MTN expects to pay out a minimum dividend of R3.30 per share for the 2023 financial year.
“The operating environment in the period ahead is expected to remain challenging, with inflation remaining elevated, and currencies under pressure,” it said.
Locally, MTN is expecting the pressure on the prepaid market to remain in the fourth quarter.
“Power outages in SA continued to be a challenge in the period, however, the significant progress made in our network resilience programme, which is tracking slightly ahead of plan, combined with lower load-shedding in the third quarter (compared with the first half of the year), has supported average network availability of above 95%,” CEO Ralph Mupita said.
MTN and its listed competitors, Vodacom and Telkom were all lower on the JSE on Tuesday, with MTN closing down 1.84% at R95.50.
Update: November 7 2023
This story contains details about a deal with Mastercard and additional information
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