Business
MTN Faces US Sanctions Roadblock While Eyeing Telkom Deal
South Africa’s telecoms giant MTN is juggling challenges on two very different fronts: a sanctions headache in the Middle East and possible deal-making at home.
Frozen in Iran
Chief executive Ralph Mupita confirmed that MTN’s minority stake in Irancell has effectively become a “frozen asset” because of US sanctions. The restrictions mean no funds can move in or out of the country. Although Irancell is not under MTN’s operational control, the Johannesburg-based group has long intended to exit its Middle Eastern investments.
Mupita stressed that MTN has made no financial provision for the US Department of Justice’s grand jury investigation into its past conduct in Afghanistan and Iran. “There is no claim, so there is no provision or contingency,” he explained. The company is also defending cases filed in US courts, maintaining that the plaintiffs have targeted the wrong defendants in the wrong jurisdictions.
Shifting Strategy at Home
Back in South Africa, MTN continues to press for industry consolidation. With operations in 16 countries, its home market now contributes less than a third of group revenue, yet local infrastructure remains a key battleground.
Mupita described the Competition Commission’s approval of Vodacom’s acquisition of Remgro’s fibre assets as a “major inflection point” for the sector. He argued that consolidation is essential if South Africa wants to avoid duplicated infrastructure and attract enough investment to improve rural connectivity.
Telkom Back on the Table
Amid this backdrop, reports suggest MTN is considering reviving talks to buy Telkom. Negotiations between the two collapsed in 2022 over exclusivity disagreements and antitrust concerns, but the prospect of a merger remains alive. Sources say the companies could resume discussions before the year ends, although no deal is guaranteed.
To strengthen its capacity for potential deals, MTN has tasked its chief financial officer, Tsholofelo Molefe, a former Telkom executive, with heading mergers and acquisitions. A tie-up with Telkom would help MTN narrow the gap with Vodacom, which still dominates the South African market under UK-based Vodafone.
Balancing Risks and Opportunities
For MTN, the road ahead is one of contrasts. In Iran, it is stuck with an asset it cannot touch. At home, it is positioning itself for growth through consolidation. Both scenarios highlight the delicate balancing act for one of Africa’s largest telecom operators: navigating global politics on the one hand and fierce local competition on the other.
Also read: Eskom Promises an End to Load Shedding, but Load Reduction Still Lingers
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Source: Business Tech
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