Turkcell takes on MTN

Turkcell takes on MTN

Not surprisingly, Turkcell has come out fighting in its latest communication related to a disputed mobile license in Iran in 2004. However, the resolution of its lawsuit against South Africa’s MTN is still months – or possibly even longer – away.

Turkcell has kept up the pressure on MTN over a disputed mobile license award with a strongly worded press release. The background to the case is fairly well known. Turkcell was the highest bidder in the tender for the first private GSM license for Iran in 2004. The license went to South Africa’s MTN. The result was a $4.2 billion lawsuit in South Africa in 2013 over the disputed Iranian license. The litigation was delayed until MTN dropped objections in 2017.

Turkcell has said that it expects “solid developments and a fair conclusion from South African police and judiciary about the lawsuit by the end of this year”. Turkcell’s case, if proved, involves some very serious allegations, among them that a number of high-level MTN executives were involved in the approval and implementation of decisions during the Iran tender process, including bribing Iranian and South African officials in exchange for the GSM license. 

MTN denies the allegations, of course, but it could probably do without more distractions and potential financial hits given the penalties it has incurred in Nigeria related to alleged unregistered SIM card records, repatriated dividends and unpaid taxes, not to mention the ups and downs of both the South African and Nigerian economies and their effects on MTN revenue.

On the upside, however, as we reported recently, MTN had something of a windfall when the value of the mobile operator’s stake in e-commerce company Jumia (estimated at about 30%) nearly tripled on the US stock market in just three days.

As for the Iranian license case, the Turkish mobile operator has sued MTN for the amount of profits, plus interest, that it has said it would have made if Iran’s first-ever private mobile phone licence had not gone to its rival. Certainly, MTN performed well in the Iranian market between the award and the 2017 court agreement to hear the lawsuit. But whether Turkcell succeeds in undermining that success we won’t know until the end of this year – at the earliest.

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