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MTN Group, an African telecommunication service, is set to exit two African countries due to Inflation.
The popular network has accepted an offer from Telecel for its equity interest in both countries: Guinea-Bissau and Guinea-Conakry. The company revealed in its 2023 financials that it was leaving the two countries to focus more on its bigger markets.
MTN Leaves Two African Countries Because of Inflation
Ralph Mupita, CEO of MTN Group, stated that inflation and devalued currency have caused a huge loss for the company. The move will allow the service to focus more on profitable markets.
The profitable markets include Ghana, Cameron, and Cote d’Ivoire. These markets positively contribute 18.6% to the company’s overall revenue, while other African countries contribute 7.3%. The statistics revealed to the group what and where to focus.
In Guinea-Bissau and Guinea-Conakry, MTN has a major portion of the market share, about 30%. However, financial struggles arose in Guinea-Bissau due to a breach of loan covenant stemming from negative EBITDA performance, resulting in a reported loss of R1.69 billion ($89,392,809) in the annual report.
MTN To Sell Shares to Telecel
MTN believes Telecel can overcome the challenges in both Bissau and Conakry. With this belief, the company is gearing up to sell its equity interest to Telecel. MTN revealed in the October 2023 report, “Assets and liabilities of both MTN Guinea-Bissau and MTN Guinea-Conakry have been presented as held for sale.”
Telecel has acquired more than one telco in the African region. The Telco service received $20 million in funding in February to expand its services across West Africa. Furthermore, the network provider also acquired a 70% stake in Vodafone Ghana a year ago.
The exit of MTN from these countries can create space for the remaining telco services to expand and explore. Also, it can enhance the services the telco companies provide to their users. It’s an opportunity for the other network companies to compete for a larger customer base.
