When you consider MTN’s numbers in Uganda, it is without doubt the biggest telecom in the Pearl of Africa, and many other parts of Africa with operations in 22 countries across the continent. However at group level, some markets are not exhibiting the the same level of success after new reports emerging raising questions about some of big yellow’s West African operations.
The African telecommunications space has been booming, but telecom giants like MTN Group and Airtel have struggled to grow in an increasingly competitive market. There have been rumors of Airtel exiting some East African Markets, consolidations here and there while others have sold off.
MTN became Africa’s largest telecom by entering previously neglected markets. Now, weary after losses and scandals, it is apparently reconsidering its presence in West Africa. Last week, MTN announced the sale of its Cyprus unit for just over $305 million to Monaco Telecom. This was the company’s sole presence in Europe. In 24 years of MTN Group existence, this was the first time it waved white flags out of the market. The sale fueled speculation of the South Africa based telecom giant exiting some parts of Africa, West Africa to be exact.
MTN Group may be scaling back after several years of strain in West Africa. According to a report by Bloomberg, CEO Rob Shuter is reviewing MTN’s portfolio and whether it really needs to be in some markets.
MTN Group having a hard time in West Africa.
From Cyprus, apparently the next stop might be West Africa. Next on the guillotine is Liberia, Guinea (yes, where Paul Pogba originates) and Guinea-Bissau according to the same report. These have the lowest subscriber base after Cyprus.
MTN Group in the Arena
MTN’s scandals in West Africa have been well documented. The telecom earlier coughed out USD 126 million to regulators in Benin to settle a licence dispute. Next up, MTN Group surrendered USD 6.6 million as a penalty in Cameroon before renewing its license there. In Ghana, MTN Group succumbed and sold its shares to local investors in exchange for a new 4G license as reported by Bloomberg. Let’s not even mention what happened in Nigeria.
Smaller markets have turned out to be death rings for MTN Group, and it wouldn’t be a surprise if they surrender them for huge markets. Huge markets like Angola and Ethiopia, where in both cases state-owned telecoms are reportedly planning to sell off a stake.
It seems all well for MTN in Uganda which currently takes the top spot as the biggest Telecom company in the country. MTN also has the biggest number of Mobile Money users as reflected in 2018 Q1 call, their mobile money and subscriber numbers grew. All these positive figures make Uganda a profitable market for MTN Group. Apparently the same can’t be said of the above West Africa African markets but whichever the case is, we are glad no exit rumors involve Uganda.
Responding to Quartz, MTN group said:. “In line with internal corporate governance, as well as [Johannesburg Stock Exchange] requirements, MTN does not comment on market speculation.” Consequently, take this with a pinch of salt.
It looks like the troubles in smaller markets exceed the monetary benefits. But hopefully, this doesn’t hurt the telecoms sector that we have grown to be proud of.
