MTN sells Afghan unit for R640m in exit from Middle East

MTN Group is selling its Afghanistan business to Beirut-based M1 New Ventures for US$35-million (R640-million) as Africa’s largest wireless carrier continues to reduce its presence outside the continent.

The Johannesburg-based company announced the deal on Friday alongside its third quarter results. The M1 Group is owned by Lebanon’s Mikati family, who sold Middle East assets to the South African company in 2006, when MTN was seeking to expand in the region.

MTN shares rose as much as 5.2% in early trade in Johannesburg, paring year-to-date losses to 20%.

The wireless carrier has been narrowing focus on its home continent since 2020, targeting high growth areas such as data sales and mobile money. The group abandoned its Syrian business and transferred its Yemen unit to a partner. Operating in Afghanistan, where MTN is the biggest operator with about a 40% market share, has been complicated since the US withdrawal in August 2021. MTN remains present in Iran.

Separately, MTN said it’s advancing talks with strategic investors to buy a stake in its fintech unit. The talks are moving towards a binding-offer stage, and MTN expects outcomes by the first quarter of next year. Customers at the fintech business increased by 23.3% to 63 million in the third quarter from a year earlier, with transaction volumes up by a third to 9.5 billion.

‘Compelling’

“In the near term, revenue growth has been impacted by new taxes in a few markets, but we continue to see the case for structural and compelling growth for fintech services in the medium term that will deepen financial inclusion across Africa,” said MTN CEO Ralph Mupita.

In South Africa, where the carrier recently ended talks to acquire Telkom, the company’s subscribers increased by more than 800 000 to 35.9 million. Group-wide, subscribers rose to 285 million.

MTN said it has repatriated R13-billion from overseas operations so far this year.  — (c) 2022 Bloomberg LP

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