Ralph Mupita, Group CEO of international operator MTN Group, has confirmed what many commentators had surmised: that MTN won’t enter Ethiopia and that it now plans to exit Syria.
MTN will not submit a bid for the soon-to-be-reauctioned second operator licence in Ethiopia, despite the news that it will now include the right to operate mobile financial services. Bidding was scheduled to open this month.
There had been speculation that the ongoing war in the north of the country had been a factor. However, Reuters says that Mupita told reporters it would be difficult for MTN to enter the market as a number three operator, which “always battles to make the returns work”. He added that repatriating cash out of the country would be challenging.
He was even more blunt about why MTN was leaving Syria after 15 years. Although MTN had already planned to exit the Middle East in the medium term, it seems that regulatory actions and licence payment demands had now made it “intolerable” to operate in Syria.
As we reported at the time, MTN Syria was placed under guardianship by a court in Damascus in March over allegations that MTN had violated the terms of its licensing contract – allegations that the telecommunications giant has denied. A Syrian demand for some $40 million seems to have encouraged MTN to abandon the operation sooner rather than later.
There had been plans for minority shareholder TeleInvest, which focuses on and invests in telecommunications companies worldwide, to buy MTN Group's 75 percent stake in MTN Syria, but these appear to have been held up due to TeleInvest failing to meet some of MTN’s compliance processes.
MTN says that, given the fact that it has no choice but to leave Syria, it reserve its rights to seek redress through international legal processes.
