Africa’s biggest mobile phone company, MTN's group 10-year plan as they begin work to expand in Iran, where it has only managed to begin repatriating profits.
The move is to cement its leading position in risky but lucrative frontier markets in the Middle East and Africa, where it expanded a decade ago, but Nigeria economy have knocked MTN’s share price and drawn sharper scrutiny of its hunt for returns in politically unstable fragile markets.
According to MTN's newly appointed head of strategy mergers and acquisitions, Stephen Van Coller in an interview with Reuters said: “We’re very excited about Iran and the possibilities there, That digital economy in Iran is going to move fast.”
The company had been unable to repatriate its accumulated dividends until recently. It said in October it had started receiving the cash and this process would take at least six months.
U.S. President-elect Donald Trump’s threat to scrap the nuclear agreement with Iran, which could bring back secondary sanctions on non-U.S. entities, which is another potencial risk, as he was asked if Trump’s win could deter or impact further investment in Iran, Coller said: “That’s a tough question, I don’t know really.”
MTN, which has set aside about $700 million in capital expenditure that includes revamping its network in Iran, also include rapidly expanding its e-commerce offering in a country where it has already invested $22 million in Snapp, a Tehran-based taxi-hailing app.
Coller also said, “While our presence in Iran’s e-commerce space is still relatively nascent, it is growing rapidly, particularly in the retail and travel sectors.”
MTN is seen as one of South Africa’s biggest corporate successes of the post-apartheid era but in recent years it has been regarded as a stock with limited growth outlook.
Investor unease over the company’s operations in its biggest market, Nigeria, where it is under intense regulatory scrutiny after agreeing to pay a reduced $1 billion fine for failing to cut off unregistered SIM cards from its network.
MTN is also the subject of a parliamentary investigation in Nigeria on whether it unlawfully repatriated almost $14bn between 2006 and 2016, which the company has denied.
Its subscriber numbers in Nigeria have fallen by nearly 4 percent to about 59 million while sales are down 5 percent. MTN shares dropped to more than 20 percent over the past year, underperforming its closest rival Vodacom, which inched up 0.38 percent.