African telecommunication giant, MTN is considering exiting three markets on the continent.
The pan-African mobile operator, which currently has a presence in 19 countries on the continent and the Middle East, said that discussions are also ongoing regarding the potential “orderly exit” of its operations in Guinea-Bissau, Guinea-Conakry and Liberia.
These changes will reduce the tally to five operating countries in the group’s West and Central Africa (Weca) segment of its portfolio, Techcentral reported.
While reasons for the market exit have not been revealed, its financial reports show that it’s facing numerous challenges across the West and Central Africa region. CEO Ralph Mupita pointed to signs of inflation and currency devaluation across several markets.
At the end of the 2022 financial year, the company’s EBITDA margin declined by 1.7 percentage points year on year to 33.1% due to pricing pressures, fintech channel subsidies and macroeconomic challenges, including local currency devaluations and higher inflation.
Per Bloomberg, these three countries are not major contributors to MTN’s revenue, accounting for only 1.6% of its total revenue in 2022. Across these countries, the telecom controls a secondary chunk of the market share, about 30% in Guinea-Bissau and Guinea-Conakry. In Liberia, Lonestar MTN is the second-largest telecom in the country.
The decision to exit these markets is not unexpected. In May, MTN was reportedly in advanced talks with Axian Group Limited to sell some of the assets in the countries in order to consolidate its presence in key markets such as Nigeria and South Africa.
Yesterday, the company pushed its network availability to 95% in its home market in South Africa, as it invested billions of rand to upgrade sites with batteries, generators, renewable energy and enhanced security to overcome power cuts in the country.
It said it invested 10.6 billion rand ($577 million) in capital expenditure and leases year-to-date in South Africa, plus another 1.9 billion rand to add spectrum in its biggest market.