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MTN in talks to sell three West African operations to Axian Telecom

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MTN Group is in talks to sell its operations in three West African nations – Guinea-Bissau, Guinea-Conakry and Liberia.

The group confirmed it has received an offer for its equity interests in the three opcos from Axian Telecom, which it is now evaluating.

"As we are at an early stage of deliberations, we emphasise that any process of this nature will entail extensive engagements with stakeholders who will be appropriately informed as and when the evaluation process has materially progressed," the group said as part of its quarterly update for the three months ended March 31, 2023.

The move is in line with MTN's "portfolio optimisation focus" within its Ambition 2025 strategy, whereby it is assessing its investments, "with the aim of improving returns and reducing risk."

"In line with this focus, MTN Group is evaluating an orderly exit of three operations in West Africa over the medium-term," it added.

At the end of March 2023, the combined subscriber base of MTN Guinea-Bissau, MTN Guinea-Conakry and MTN Liberia represented approximately 6.1 million of the Group's total 291 million subscribers, and contributed just 0.7% to earnings before interest, tax, depreciation and amortization (EBITDA).

At the end of March 2023, MTN Guinea-Conakry had almost 3.2 million subscribers, MTN Liberia had just over 2 million and MTN Guinea-Bissau had just 871,000 subscribers.

At the end of March 2023, MTN Guinea-Bissau, MTN Guinea-Conakry and MTN Liberia had a combined subscriber base of 6.1 million.  (Source: Image by wirestock on Freepik).
At the end of March 2023, MTN Guinea-Bissau, MTN Guinea-Conakry and MTN Liberia had a combined subscriber base of 6.1 million. (Source: Image by wirestock on Freepik).

In West Africa, MTN also operates in Ghana, Cameroon, Côte d'Ivoire, Benin and Nigeria – its biggest operation on the continent.

MTN's West and Central Africa (WECA) region – which excludes Nigeria – reported service revenue growth of 10.8% in the first quarter of 2023, with overall subscribers up by 2.7% to 72.6 million.

MTN Nigeria's service revenue grew by 20.4%, supported by growth across key revenue segments of voice, data, fintech and digital services. Mobile subscribers in Nigeria also increased by 9.4% to 76.7 million.

This week, Connecting Africa reported that MTN was expanding its 5G network in Nigeria and managing network issues in Sudan and Cameroon.

Axian's African aspirations

In April 2022, a consortium led by Madagascar-based Axian bought operator Tigo Tanzania in a deal worth $100 million. This was part of Millicom's multi-year plan to divest its African operations and focus on its Latin American markets.

As of 2022, Axian had interests in 130 businesses across 48 countries, including 77 businesses across 28 countries in Africa.

In February 2023, Axian Group announced a new investment arm aimed at funding Africa's fledgling technology startups.

Middle East exit strategy

Since August 2020, MTN has also been working toward an orderly exit out of the Middle East.

At the MTN Group results presentation in March 2023, Group CEO Ralph Mupita said that MTN was moving forward with plans to sell its Afghanistan business to Beirut-based M1 New Ventures for US$35 million.

"The process to exit Afghanistan in an orderly fashion through the sale of MTN's entire shareholding to a wholly-owned subsidiary of M1 remains on track, with regulatory engagements well progressed," the group said in the Q1 update.

It said the exit of Afghanistan is expected to be completed in the second financial half of 2023.

MTN had originally planned to sell the Syrian operation first, but later decided to abandon its telecom operation in Syria in August 2021, saying that the regulatory actions and demands in Syria had made operating in the country "untenable."

This came after its Syrian business was placed under judicial guardianship in February 2021.

The Yemen business, meanwhile, was sold in November 2021 to the group's minority shareholders in the country.

After the Afghanistan deal is finalized, the only Middle Eastern operation left will be MTN's joint venture in Iran – MTN Irancell – of which it owns 49%.

Related posts:

*Top image source: MTN Group.

— Paula Gilbert, Editor, Connecting Africa

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