In a bid to address mounting challenges across the West and Central Africa region, telecommunications giant, MTN, is contemplating its departure from Guinea-Bissau, Guinea-Conakry, and Liberia.
The decision, which aligns with MTN’s “Ambition 2025” strategy, comes due to issues highlighted by MTN CEO Ralph Mupita, including inflation and currency devaluation.
MTN’s presence in Guinea-Bissau and Guinea-Conakry, where it owns around 30% of the market share, has been slowed by financial struggles.
A breach of loan covenant in Guinea-Bissau, stemming from negative EBITDA performance, resulted in a reported loss of R1.69 billion ($89,392,809).
Consequently, MTN is considering divesting its interests in these countries to focus on stronger markets like Ghana, Cameroon, Nigeria, and Cote d’Ivoire.
To facilitate this transition, MTN finalized a share purchase agreement with Telecel, an established telecommunications provider, to acquire its ownership interests in MTN Guinea-Bissau and MTN Guinea-Conakry.
While the value of the sale remains undisclosed, MTN emphasizes its focus on ensuring a smooth transition for customers, employees, and stakeholders. Telecel’s involvement is expected to drive growth and technological advancement in these regions, contributing to overall economic progress.
MTN’s operational challenges extend beyond Guinea-Bissau and Guinea-Conakry. In Nigeria, the company faces a demanding operating environment characterized by increasing inflation, currency devaluation, and foreign exchange shortages.
Despite these limitations, Nigeria, alongside other key markets like Ghana, Cameroon, and Cote d’Ivoire, continues to facilitate MTN’s revenue generation, collectively contributing 18.6% to the group’s revenue.
Beyond the African continent, MTN recently divested its entire stake in MTN Afghanistan to Investcom AF, signaling a broader strategic realignment. The divestment was accompanied by a six-month transitional services agreement, pointing to MTN’s devotion to ensuring a seamless transition period.
The telecom giant’s potential exit from Guinea-Bissau, Guinea-Conakry, and Liberia is in line with the company’s focus on consolidating its presence in markets with greater growth potential and stability.
This will also enhance Telecel’s operational footprint leveraging synergies to drive future growth.
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