JUST IN: MTN Sets To Exit Some African Countries, Full List
Telecommunication giant, MTN Group, has revealed that it looks to exit African countries it described as smaller markets in the West and Central Africa region.
This is as MTN Group revealed that it has accepted an undisclosed offer from Africa-focused telecommunication service, Telecel, for the sale of its equity interests in MTN Guinea-Bissau and Guinea-Conakry.
MTN made the revelations in its 2023 financials, as its spokesperson confirmed the sale of the business segments but declined to speak on how much the sale would cost.
MTN in the report said its Guinea-Bissau and Guinea-Conakry businesses have been classified as held for sale as of December 31, 2023.
A note in its financials reportedly said that “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.”
It was reported that this move will allow MTN to focus on Ghana, Cameroon and Cote d’Ivoire, which are stronger markets in the West and Central African region that collectively contribute 18.6% to its revenue, over other West and Central African countries that contribute 7.3% to the revenue of the group.
Whereas the value of the sale remains undisclosed, MTN has said further updates regarding the transaction will be provided as at when due.
But it has been noted that the new development will enable MTN to prioritise its operations in stronger markets such as Ghana, Cameroon, and Cote d’Ivoire in the West and Central Africa region.
MTN noted that the agreement was reached in December 2023 and is subject to several conditions precedent, adding that 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.
The Telecom group further stressed its potential exit from Guinea-Bissau, as the Chief Executive Officer (CEO), Ralph Mupita, cited signs of inflation and currency devaluation across several markets as part of the group’s reasons.
MTN across these countries, controls a secondary chunk of the market share up to about 30 percent in Guinea-Bissau and Guinea-Conakry.
MTN in Guinea-Bissau, experienced financial difficulties following a breach of loan covenant due to negative EBITDA performance, reporting a loss of R1.69 billion ($89,392,809) in its annual report.
These markets collectively contribute 18.6 percent to MTN’s revenue, compared to other West and Central African countries, which contribute 7.3 percent to the firm’s overall revenue.
The company’s audited financial results for the year ended December 31, 2023 in Nigeria, reportedly showed that it witnessed a very challenging operating environment characterised by rising inflation, currency devaluation and foreign exchange shortages.
