Telecommunication giant, MTN, has signalled a potential departure from Guinea-Bissau, Guinea and Liberia in a bid to address mounting challenges across the continent.
The Chief Executive Officer, Ralph Mupita said that the decision aligns with MTN’s “Ambition 2025” strategy. Mupita further said that inflation and currency, notable issues across several markets were other reasons the company plans to exit the countries.
MTN’s presence in Guinea-Bissau and Guinea, 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).
According to MTN, the decision to exit these markets will allow it to focus on stronger markets like Ghana, Cameroon, Nigeria, and Cote d’Ivoire in the West and Central Africa region.
These markets collectively contribute 18.6% to the group’s revenue, compared to the 7.3% contribution from other West and Central African countries.
In Nigeria, MTN encountered a challenging operating environment marked by increasing inflation, currency devaluation, and foreign exchange shortages, as evidenced in the audited financial results for the year ending 31 December 2023.
Additionally, outside of Africa, MTN divested its entire stake in MTN Afghanistan to Investcom AF and has initiated a six-month transitional services agreement.
MTN finalized a share purchase agreement with Telecel, a telecommunications provider, to acquire MTN’s ownership interests in MTN Guinea-Bissau and MTN Guinea.
This deal was stated in MTN’s 2023 financial report and is contingent upon various conditions precedent.