Telecom giant, MTN, is reportedly in advanced talks with Axian Group Limited to sell some of its assets in West Africa. The company is looking to divest its stake in its Liberian subsidiary, as well as its Guinea-Bissau and Guinea operations.
The sale is part of MTN’s strategy to streamline its operations and focus on its core markets. The company has been working to simplify its portfolio for several years, and this move will allow it to consolidate its presence in key markets such as Nigeria and South Africa.
The deal has not been finalised, and there is no guarantee that a transaction will go ahead, the company said. The three countries (Liberia, Guinea and Guinea Bissau) accounted for a paltry 1.6% of MTN’s revenue in 2022, according to data compiled by Bloomberg.
The plan to divest from these markets might not be unconnected to the significant challenges the company has been facing in some of its West African markets in recent years. In Guinea-Bissau, for example, the company has struggled to turn a profit due to tough regulatory conditions and a weak economy.
The sale of its assets in these markets will allow MTN to focus its resources on its more profitable operations in the region. The company is the largest telecom provider in Nigeria, with over 75 million subscribers. It also has a significant presence in South Africa, where it is headquartered.
MTN operates in 19 countries of the region and has exited certain Middle Eastern businesses such as Afghanistan, Yemen and Syria.
In 2022, Axian bought Millicom International Cellular’s Tanzanian operations. The firm’s telecommunications unit has invested in towers, undersea cables, data centres, financial technology as well as a number of phone operators in countries such as Madagascar and Senegal.
Read also: MTN Nigeria coughs up N62.9b to rent NTEL spectrum, extend 3G license
MTN’s strategic expansion
Africa, which has a young population and a burgeoning market for smartphones, has proven to be an attractive place for companies targeting telecom deals. Telecom providers like MTN have so far leveraged on that large market to consolidate their ever-growing footprint.
In addition to its West African operations, MTN has a presence in other parts of Africa, as well as in the Middle East. The company has been working to expand its footprint in many other regions with its attempt at obtaining a license in Ethiopia more recent.
The sale of some of its West African assets is likely to be welcomed by investors, who have been pressuring the company to improve its performance in recent years. MTN has faced a number of challenges, including regulatory hurdles, legal disputes, and competition from other providers.
Despite these challenges, however, MTN remains one of the largest and most successful telecom companies in Africa. The company has a strong track record of growth and profitability, and it has demonstrated an ability to adapt to changing market conditions.
As part of its strategy to streamline its operations, MTN has also been focusing on developing its digital services. The company has launched a number of innovative products and services in recent years, including mobile money and e-commerce platforms.
These initiatives have helped to drive growth and diversify the company’s revenue streams, and they have positioned MTN well for the future. With the sale of its West African assets, the company will be able to focus even more on these digital services, which are expected to become increasingly important in the years ahead.
Some weeks ago, the company, together with Airtel Nigeria, led the list of most valuable quoted companies in Nigeria in the first quarter of 2023, with market capitalizations of N5.56 trillion and N4.89 trillion, respectively.
The telecommunication giant also recently informed shareholders to brace up for massive profits because it expects to report 35% to 45% higher earnings per share and 12% to 22% higher headline earnings per share than the previous year.
More recently, Wi-flix, a streaming platform partnered with MTN to offer unbeatable packages to consumers in Zambia
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