The MTN Group, a leading telecommunications company, has stated its intention to withdraw from smaller markets in the West and Central Africa region. Specifically, MTN has agreed to sell its businesses in Guinea-Bissau and Guinea-Conakry to Telecel, an Africa-focused telecom service. The price of this deal has not been disclosed.
In its financial report for 2023, MTN revealed this strategy, with a spokesperson confirming the sale but remaining silent on the financial terms. The report notes, “As of December 31, 2023, our Guinea-Bissau and Guinea-Conakry operations are prepared for sale.”
The document also mentions, “Telecel, which has a significant African presence, is deemed an ideal candidate to nurture and expand these businesses, thereby contributing to technological and economic advancements in these regions.”
This divestiture is aligned with MTN’s focus on prioritizing its operations in larger markets within the region, such as Ghana, Cameroon, and Cote d’Ivoire, which together account for 18.6% of its revenue. This is in contrast to the smaller markets it is exiting, which contribute 7.3%.
“Further details on the transaction will be shared in due course,” MTN has indicated, emphasizing the strategic refocusing. The sale agreement, finalized in December 2023, awaits various approvals. Telecel is highlighted as being well-placed to stimulate growth and contribute positively to the markets in question.
MTN’s potential exit from Guinea-Bissau is influenced by broader challenges, including inflation and currency depreciation in several markets, as noted by MTN’s CEO, Ralph Mupita. In Guinea-Bissau and Guinea-Conakry, MTN commands about 30% market share.
Financial difficulties in Guinea-Bissau, specifically a breach of loan covenant due to negative EBITDA performance, led to a reported loss of R1.69 billion ($89,392,809) in the annual report.
These smaller markets, inclusive of Guinea-Bissau and Guinea-Conakry, significantly contribute to MTN’s revenue, standing at 18.6%, in contrast to other West and Central African countries’ contribution of 7.3%.
MTN’s 2023 financial results in Nigeria pointed to a “very challenging operating environment” characterized by heightened inflation, currency devaluation, and foreign exchange scarcities.
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