MTN Group, Africa’s largest network operator by subscriber base, has sold its equity stakes in MTN Guinea-Bissau and Guinea-Conakry to Africa-focused telecommunication service, Telecel.
- The telecommunications giant made the announcement in its annual financial report for 2023, noting that despite having a large market share in both countries, it has struggled financially in recent years.
- While the value of the sale remains undisclosed, MTN emphasizes its focus on ensuring a smooth transition for customers, employees, and stakeholders.
- MTN CEO Ralph Mupita cited financial challenges including high inflation and currency devaluation as reasons for the exit.
“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,” a note in its financials added.
Across the exited countries, the telco controls a secondary chunk of the market share, about 30% in Guinea-Bissau and Guinea-Conakry.
A look at some of the critical metrics showed that as of March 31, 2023, the company’s combined subscriber base of the three countries (including Liberia) represented approximately 6.1 million of the group’s total 291 million subscribers and contributed 0.7 per cent to its earnings before interest, taxes, depreciation, and amortisation (EBITDA).
In Guinea-Bissau, MTN’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) have been consistently negative, leading to a breach of its loan covenants and a significant loss of R1.69 billion ($89,392,809).
This move will allow the company to focus on Ghana, Cameroon and Cote d’Ivoire, stronger markets in the West and Central African region which collectively contribute 18.6% to the group’s revenue, over other West and Central African (WECA) countries that contribute 7.3% to the firm.
Outside of Africa, MTN has also divested 100% of its shares in MTN Afghanistan to Investcom AF and has entered into a six-month transitional services agreement.
“On 21 February 2024, all the conditions precedent were finalised in relation to MTN’s sale of 100% of the shares in MTN Afghanistan to Investcom AF Limited (Investcom AF) and accordingly, the sale has now been completed. The exit from Afghanistan completes the phase of our Middle East exit of our previously consolidated subsidiaries in that region.” Reads the company’s 2023 financials, in part.
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