Telco giant MTN reshaping presence in Africa with key exits

• MTN is divesting its stakes in Guinea-Bissau and Guinea-Conakry to Telecel.
• The telco giant will now shift more focus on rising markets Ghana, Cameroon, Nigeria, and Cote d’Ivoire.
• With the exception of Cameroon, these three markets account for a combined 18.6% of the Group’s revenue.

South African tech heavyweight MTN has unveiled a key shift in its market strategy involving the divesture of its stakes in Guinea-Bissau and Guinea-Conakry businesses to Telecel.

This move is poised to mark a strategic change in bolstering MTN’s presence in Africa in what is perceived as stronger markets within the West and Central Africa region.

The agreement, which was sealed in December 2023, sees MTN ceding control to Telecel, a telco with a notable footprint in the African Telecommunications business. While the financial disclosures of the deal remain unclear, MTN has informed its stakeholders that further details will be published in the coming weeks.

This transaction marks the South African firm’s intention to consolidate its business operations, focusing on markets such as Ghana, Cameroon, Nigeria, and Cote d’Ivoire, where the telco enjoys a robust presence and projects a substantial growth trajectory.

MTN presence in West Africa

At the moment, MTN enjoys a subscriber base of over 77 million in Nigeria, over 29 million in Ghana and nearly 20 million in Cote d’Ivoire as of March 2023. Overall, it reported a subscriber base of 290 million across all its markets in Africa in the quarter ending December 2023.

Telecel’s acquisition of MTN’s interests in Guinea-Bissau and Guinea-Conakry is a move that potentially places Telecel in a position to steer the next phase of growth in these markets.

The company has expressed confidence in Telecel’s capacity to drive technological and economic advancements, ensuring that the transition will be seamless for customers, employees, and its stakeholders.

According to the company, its decision to exit these markets comes after an evaluation of its business portfolio across the West and Central Africa region. The telco’s 2023 financial report highlighted the adverse impacts of inflation and currency devaluation on its operations, particularly in Guinea-Bissau and Guinea-Conakry where the company enjoyed a secondary market share position.

The financial implication of these challenges was especially evident in Guinea-Bissau, where the telecommunications giant grappled with financial setbacks, finally culminating in a loss of about $89.39 million due to adverse EBITDA performance in the 12 months ending December 2023.

Forex woes further mirrored the contrasting fortunes of the telco giant in both countries, with Guinea-Bissau and Guinea-Conakry registering gains and losses, respectively.

Plan set to strengthen MTN financial base

By narrowing its focus to Ghana, Cameroon, Nigeria and Cote d’Ivoire, MTN seeks to leverage these markets’ combined contribution of 18.6 percent to the group’s revenue. This strategic pivot is envisioned to strengthen its financial base and operational efficiency, particularly against the backdrop of the challenging economic climate in Nigeria, which has been marred by inflation, currency devaluation and forex shortages for businesses.

Additionally, MTN’s strategic position will not be confined to the African business. The company has also divested its entire stake in Afghanistan unit, transitioning the operations to Investcom AF. This move is accompanied by a six-month transitional services agreement, further exemplifying the telco giant’s commitment to ensuring operational continuity and stakeholder engagement during this phase.

As MTN recalibrates its strategy, focusing on target markets with robust growth prospects, the telecommunications industry in Africa is set to change. Analysts will be watching keenly to monitor how this reorientation bolsters MTN’s operational resilience and financial health as well as the ripple effects it will have on telecommunications in Africa.

Headquartered in South Africa, MTN a company with a market capitalization of over $9.1 billion, offers data, voice, cloud services, IoT, and a suite of other telecommunication services across Africa and the Middle East.

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