Sun-blinded and nostalgic

MTN’s Road To Damascus Is Certainly Not Via Syria

| March 1, 2021

MTN is biggest telco in Africa but the South African company’s footprints in the Middle East are starting to fade. Unless there’s a colossal reversal of fortune, MTN Syria will eventually fall on the sword.

In a move that comes off as a nostalgia of sorts, MTN is unlinking itself from non-African markets, one country at a time. In Syria where it has just been placed under judicial guardianship, the telco is looking for a USD 65 Mn ticket out of the country. That’s a 75 percent stake in MTN Syria on auction.

There has been existing tensions between the mobile operator and the owners of the road it’s taking to Damascus. The Syrian government hasn’t always taken the wrist-slapping approach with MTN. Now, it seems to have driven the nail into coffin by filing a high-profile lawsuit against the operator.

Last week (Feb 17th), Syria’s Ministry of Telecommunications and the Syrian Telecommunications and Post Regulatory Authority joined hands to take MTN Syria’s case to the administrative court of Damascus. According to the authorities, the firm is guilty of mismanagement, and has violated operating outlaid licence conditions.

Lawsuit or not, though, MTN intends walking the talk about retreating from the Middle East. While denying the seemingly damning allegations that put it on the brink of scandalous standoffs with multiple no-nonsense governments, Syria will be the first market in the region the telco abandons.

MTN Syria intends to appeal in court, meanwhile the business remains committed to divesting its assets. TeleInvest, a minority shareholder in the unit, will run the company’s daily operations while it seemingly chases an exit faster than an acquittal.

TeleInvest, a company that provides high-tech solutions for electronic trading, was once propped to take up the 75 stake. That is probably why MTN Syria has announced that the multimillion-dollar deal is still open to a complete TeleInvest takeover for the said USD 65 Mn consideration. When the idea to buy the shares first surfaced, however, the amount was kept undisclosed.

For MTN Group—the parent company in South Africa—selling off to TeleInvest is part of its medium-term plans to catch a break from the foreign problems strapped to its back. While the business thrives back in the motherland, iron-fisted nations like Afghanistan, Iran, Turkey and Syria take turns to legally trouble the organization.

The Group’s (probably) biggest scandal in the Middle East is being accused of bribing the notoriously barbarian Taliban militants to guard its cell towers—a good number of which are in proximity to the scenes where Americans were attacked (and killed) in the country.

For this grave case and every other charges it’s facing, the organization argues innocent and appears ready/willing to prove so in court. But apart from lawsuits, MTN’s balance sheets in the Middle East aren’t brandishing attractive numbers. In the 6 months that ended in June 2020, the region supplied only 0.7 percent of MTN Group’s EBITDA.