MTN receives $35 Million Binding Offer for its Afghanistan Unit
Mobile service provider, MTN Group, announced on Thursday that its first-half earnings had increased by 46.5% and that it had received a $35 million binding bid for its Afghanistan business, bringing the Middle East to a close.
Group Chief Executive Officer Ralph Mupita stated to journalists on a news call that a gross amount of $35 million would be paid over time, with proceeds totaling $31 million. He did not reveal the buyer. After selling MTN Yemen and giving up on MTN Syria last year, the deal’s conclusion would herald MTN’s departure from the Middle Eastern markets.
“The completion of the deal would conclude MTN’s exit from Middle Eastern markets, after selling MTN Yemen and abandoning MTN Syria last year. Its 49% financial investment in Irancell will continue to be managed within the MTN portfolio,” said Mupita.
As part of its development plan in emerging regions, MTN began operating in the Middle East in June 2007 when it completed the $5.5 billion purchase of Lebanese telecom holding company Investcom. At the time, Investcom had businesses operating throughout the Middle East.
According to Phuthuma Nhleko, who was the CEO of MTN Group at the time, the two firms had a shared aim to be the leader in new markets. However, ongoing political unrest in the area has complicated and unpredictable operations.
Last year, when MTN announced an exit from the Middle East to simplify its structure and reduce exposure to riskier markets, Mupita had noted that the decision was driven by a need to simplify its portfolio and focus limited resources on executing a Pan-African strategy. Since then, the company has massively increased its product offering in Africa.
In May this year, the group kicked off its Fintech subsidiary in Nigeria, MoMo Payment Service Bank (MoMo PSB). MoMo PBS currently boasts an agent network of over 166,000 active agents and a digitized partnership infrastructure. The subsidiary plans to continuously scale its agent network to reach Nigerians and remove friction from regular payment by digitizing cash payments.
The Group had also announced last month of its plans to take over South African fiber provider, Telkom. Pending agreement, the deal will see MTN purchase Telkom’s entire issued share capital in exchange for shares or a cash and share combination.
MTN discontinued operations in Syria in August last year after claiming that conditions there were “intolerable.” Notably, the selling non-core assets, including as its tower business, to free up funds for network capacity and service expansions is a sign of MTN’s increased interest in streamlining its services.