South African telco giant, MTN has announced its exit from the Middle East. The firm is selling its 75% stake in MTN Syria to TeleInvest which holds the other 25%.
After the exit, MTN will focus on growing its operations in the African region.
Group President and CEO, Rob Shuter, said, “MTN has resolved to simplify its portfolio and focus on its pan-African strategy and will, therefore, be exiting its Middle Eastern assets in an orderly manner over the medium term. As a first step, we are in advanced discussions to sell our 75% stake in MTN Syria.”
MTN’s tenure in the Middle East has not been without struggle; it was accused of bribing Iranian officials for a 15 year operational license in the country. It was also alleged to have violated the Anti-Terrorism Act and of aiding militant groups in Afghanistan.
It had significant trouble getting its revenues out of Iran due the crisis resulting from US sanctions. The impact of the COVID-19 pandemic did not help the situation.
MTN Group announced the exit alongside its Interim Financial Results for the first half of 2020.
At the end of June, Middle East assets contributed less than 4% to the entire group EBITDA. MTN Syria contributed 0.7% to MTN’s reported EBITDA in the first half of 2020. The net assets attributable to MTN Syria in the MTN Group accounts have been written down to the estimated recoverable amount of US$80 million.
Hence, the decision to shut down all its operations in Afghanistan, Yemen, and Syria. It is also planning to withdraw its 49% minority shares in Irancell.