MTN Group Announces Plan to Exit Two African Countries
In a major shift in its African market strategy, MTN Group, a leading telecommunications entity, has recently announced its decision to divest from two of its operations in the West and Central Africa region.
The markets in question, Guinea-Bissau and Guinea-Conakry, are set to be handed over to Telecel, an Africa-centric telecommunication service provider, following an undisclosed agreement. This move was disclosed alongside the company’s financial results for the year 2023, marking a pivotal moment in MTN’s operational focus.
MTN has categorized its businesses in these two countries as held for sale as of the close of 2023. This decision stems from a strategic evaluation aimed at enhancing operational efficiency and market focus. Telecel, recognized for its robust presence and operational prowess across the African telecom sector, is anticipated to foster substantial growth and technological advancement in these markets.
The divestiture enables MTN to redirect its focus towards more promising West and Central African markets, namely Ghana, Cameroon, and Cote d’Ivoire. These markets collectively contribute a significant 18.6% to MTN’s overall revenue, in stark contrast to the 7.3% contributed by other countries within the same region, including Guinea-Bissau and Guinea-Conakry.
MTN’s decision is influenced by various market dynamics, including inflation and currency devaluation concerns, as highlighted by MTN CEO Ralph Mupita. Particularly, MTN’s operations in Guinea-Bissau faced financial challenges, underlined by a reported loss of approximately $89.4 million due to negative EBITDA performance.
While the specifics of the sale remain under wraps, MTN promises timely updates regarding the transaction’s progress. The agreement, reached in December 2023, is subject to several prerequisites before finalization.