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Business of Tech

Turkcell not giving up on MTN Iran battle

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Turkcell is not giving up on its battle with South African-based operator MTN over a license in Iran. Although the 10-year legal battle seemed concluded last week, now the Istanbul-based operator says it plans to appeal the case.

Turkcell has for years alleged that MTN engaged in illicit activity to gain a GSM license for MTN Irancell – of which MTN owns 49% – back in 2005, a claim that MTN has repeatedly denied.

Last week Connecting Africa reported that the most recent court case against MTN had been dismissed by the High Court of South Africa with costs.

The SA court said that the Iranian courts have jurisdiction and not the South African courts, but Turkcell disagrees.

"We are of the opinion that, in the lawsuit, which has been ongoing for almost 10 years, South African law should be applied and the South African courts should also have jurisdiction over the matter since MTN's headquarter is located in South Africa and the unlawful acts were planned in this location," Turkcell said in a statement this week.

"Therefore, our Company will continue to enforce all its legal rights against this decision, including an appeal of the decision, and will strongly and decisively continue to defend its rights for both compensation of the damages incurred and also to ensure that the relevant executives of MTN are held accountable and punished," it added.

Decade-long battle

Turkcell first sued Johannesburg-based MTN in a US court in 2012, alleging MTN unlawfully secured the Iranian license. But the case was later withdrawn from the US courts.

Then, in 2013, Turkcell and its subsidiary, East Asian Consortium (EAC), instituted legal action in the High Court of South Africa against MTN Group and some of its subsidiaries.

Turkcell and EAC sought damages of US$4.2 billion, excluding interest, for what the telco calculated it would have made in profits had it operated the Irancell license instead of MTN.

The case then went quiet but reappeared in 2017 when Turkcell announced that the lawsuit was going to be examined on its merits, and MTN filed a plea asking the court to dismiss the case.

In November 2020, Turkcell withdrew as a plaintiff in the case but EAC continued as the sole plaintiff.

At the end of November 2022, MTN announced that the case had been dismissed in SA and said it had "consistently maintained that the Turkcell Litigation was without merit".

Exit strategy

Since 2020, MTN has been planning to leave the Middle East entirely and focus on its African footprint.

In August 2021, the operator abandoned its operations in Syria and in November 2021 itexited Yemen.

In August 2022, MTN was offered $35 million to sell its Afghanistan operation.

Want to know more about telco financials, regulation and deals in Africa? Check out our dedicated Business of Tech content channel here on Connecting Africa.

MTN had originally planned to also sell its 49% investment in Irancell. But, as part of its 2022 interim results, it said that Irancell will continue "to be managed for value within the MTN portfolio" for now.

MTN has struggled over the years to repatriate cash out of its Iran business due to US sanctions on the country.

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*Top image source: Image by Racool_studio on Freepik.

— Paula Gilbert, Editor, Connecting Africa

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