Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Business of Tech

MTN to fight Syrian court ruling

Article Image
Africa and Middle East operator MTN has vowed to fight a court ruling in Syria that has put its business there under guardianship, saying the ruling has no basis in law.

The group confirmed in a statement that the Administrative Court of Damascus on February 25, 2021, ruled that MTN Syria be placed under a judicial guardianship, effective immediately.

The court appointed the chairman of Teleinvest, the minority shareholder of MTN Syria, to serve as the judicial guardian.

The lawsuit was filed the previous week by the Syrian Ministry of Telecommunications and the Syrian Telecommunications and Post Regulatory Authority seeking interim measures against MTN Syria.

"MTN Group strongly disagrees with the allegations made before the Court as well as the Court's decision and intends to file an appeal. In addition, MTN is also considering other appropriate steps to take in light of the ruling," MTN said in its statement.

MTN didn't explain exactly what the allegations are but Reuters reported that the violations were to do with the terms of its licensing contract, which the state alleges deprived the government of revenue.

MTN said the Syria business remains an ongoing concern but the judicial guardian will be responsible for managing the day-to-day operations.

"MTN Group is committed to continued compliance with all applicable laws and continues to monitor all developments to ensure it acts in accordance with applicable laws," it said.

MTN is not alone in its Syrian troubles. The only other mobile operator, Syriatel, was also placed under judicial custody last June.

Selling out

MTN's Middle East operations have given it a number of headaches in recent years. In August 2020, MTN told the market it was planning an "orderly exit" out of the Middle East in the next three to five years, with the MTN Syria business first to be sold.

Back then, former Group CEO Rob Shuter said it was already in advanced discussions to sell its majority stake in MTN Syria to the minority shareholder.

"As communicated in 2020, we had agreed terms to exit Syria through sales of our 75% shareholding to Teleinvest for a total consideration of $65 million. We remain committed to that," an MTN spokesperson confirmed with Connecting Africa on Monday.

Teleinvest already owns the other 25% of the company.

It's also not a terribly profitable business for MTN. In the six months to June 2020, MTN Syria contributed just 0.7% to the group's reported earnings before interest, tax, depreciation and amortization (EBITDA).

"At that time, the net assets attributable to MTN Syria in the MTN Group accounts had been written down to the estimated recoverable amount of R1.4 billion (US$80 million)," MTN added.

Overall MTN operates in 21 countries in Africa and the Middle East, with more than 260 million customers.

Middle East woes

Its Middle East businesses include consolidated subsidiaries in Syria, Yemen and Afghanistan, as well as the MTN Irancell business, which is a joint venture in Iran.

But a number of operations in the region have run into legal issues of late.

In Afghanistan, it has been facing an anti-terrorism court case since December 2019. The complaint, via a US court, alleged that MTN and other Western businesses supported the Taliban by making payments to ensure the protection of their infrastructure, which MTN has denied and filed a motion to dismiss.

US sanctions blocked MTN's ability to repatriate cash from MTN Irancell, of which it owns 49%.

MTN has also repeatedly denied allegations from Istanbul-based Turkcell that it engaged in illicit activity to gain its GSM license in Iran in 2005.

Related posts:

*Top image source: warrenski on Flickr CC 2.0

— Paula Gilbert, Editor, Connecting Africa

Innovation hub

Story

Connecting Africa Podcast: Ep. 8 – Edtech for the future of work

This week we are joined by Eyitayo Ogunmola, CEO of Utiva, which is a startup offering technology skills training to prepare young people for the the future of work.

Story

Hot startup of the month: Malawi's Converged Technology Networks

Startup Converged Technology Networks is focused on addressing the unmet demand for residential broadband Internet access in Malawi.

More Innovation hub

Latest video

More videos

Guest Perspectives

Story

Omdia View: October 2021

By Omdia Analysts

Across the Middle East and Africa, regulators are beginning to facilitate spectrum allocation to operators in the region for the deployment of new and innovative technology.

Story

Research Bites: Why Africans stop using mobile apps

By Chinedu Wilfred Okonkwo, Magda Huisman and Estelle Taylor

This article – in collaboration with the African Journal of Science, Technology, Innovation and Development – explores the reasons behind why Africans stop using certain mobile apps.

More Guest Perspectives

Partner perspectives

All Partner Perspectives

AfricaCom perspectives

Story

Digital inclusion as a catalyst for economic empowerment: Mastercard's Imelda Ngunzu

Mastercard's Imelda Ngunzu talks to Connecting Africa about how digital payment solutions and mobile money are transforming the lives of small business owners, women and marginalized groups in East Africa.

Story

Accelerating women in STEM: In conversation with GirlCode's Tinyiko Simbine

GirlCode co-founder and CFO Tinyiko Simbine talks about why it's important to help girls and young women excel in science, technology, engineering and mathematics (STEM) fields.

Story

How Poa Internet is unlocking meaningful connectivity in East Africa

Poa Internet's CEO Andy Halsall shares his views on what it takes to develop last-mile connectivity and get Africans online in a meaningful way.

More AfricaCom perspectives

Flash poll

All polls

Archived webinars

Meeting SME’s where they are - Building inclusive ecosystems for Africa’s small business owners

Micro and small businesses have been, and still are, the spine and lifeblood of the African economy, making up 90% of businesses on the continent.

Many of these businesses have still been operating in traditional ways and serving non-digital customers. With Covid-19 expediting the digital transformation process, businesses - big and small - have been forced to adapt to operate successfully in a more digital-first environment.

To ensure that the digitalization of Africa’s market doesn’t leave micro and small businesses behind, digital solutions must be inclusive and create business-ready environments. But how can we ensure that African SMEs become digitally enabled?

In this webinar we will share from our own experience on how to create such an environment, and the actions we took in vcita to get there, including:

  • Closing the digital literacy gap through tech inclusion 
  • Making a positive impact on local communities
  • Building the foundations for digital inclusion and small business growth in a technology-accelerated world
  • Building the foundations for digital inclusion and small business growth in a technology-accelerated world

Register Here >>

More Webinars

Sponsored video

More videos

Like us on Facebook

Newsletter Sign Up


Sign Up