MTN TELECOMMUNICATIONS TO EXPAND IN AFRICA
By Paul Ndiho
One of Africa’s largest mobile phone companies is working on expansion plans that could see the firm spend billions of U.S. Dollars on the continent. MTN telecommunications group, which has a market value of over 30 billion dollars, is eyeing Africa’s data market– a market that has yet to be fully tapped.
Incorporated in 1994, MTN is arguably Africa’s biggest mobile phone company, operating in 21 countries. It also provides internet service to businesses in 13 countries, spanning three continents. The Tele-communications giant is set to spend up to 8 billion dollars in acquisitions and investments on the continent.
MTN is also one of 15 telecom providers to make the cut to a second-round of bidding for an operating license in Burma, also known as Myanmar, according Sifiso Dabengwa, its chief executive.
“We still are looking at growth in terms of mergers and acquisitions opportunities; there are areas which we are keen on getting licenses. We are participating in the Myanmar licensing processes where they will license two operators, between now and June this year. There are some countries in Africa on the north coast that we would still be interested in going into and also other countries stand alone, which we believe have good opportunities which we can create value from.”
The south african-based mobile operator which has a market value of $34 billion is interested in acquiring a North African provider, to help diversify its earnings. MTN expects to repatriate nearly 135 million of its funds tied up in Iran this year– and the company has been talking with the Iranian central bank and U.S. Authorities on returning its dividends without violating sanctions.
A U.S. Court has delayed a $4.2 billion lawsuit against it by Turkish rival Turkcell, pending a separate Supreme Court decision. Turkcell alleges that MTN used corrupt practices to win an Iranian operating license.
However, an external committee appointed by MTN has, found the allegations to be false and that the company’s lawyers are confident that the Washington, dc court will throw out the case because it did not fall under its jurisdiction.
Still– the top executive says the data market in Africa is not being maximized and there is room for growth.
“Most of our markets are still under 10 percent, the key issue is that the penetration of devices that would drive data is still low, i think affordability of the devices is still a problem and as devices become more affordable, as prices come down, we will have more 3g handsets, more limited functionality smart phones, and that will definitely drive data. Internet penetration is still below 10 percent in most countries, so the opportunity is still very big.”
In 2010, MTN invested in fiber-optic cables, as well as growing its access to broadband capacity on undersea cables. Analysts say that MTN predominantly uses independently owned outlets to distribute its products and services, but it also has its own branded stores. The Tele-communications giant employs more than 34-thousand employees.
MTN recently received a license in Ethiopia to provide essentially all services other than standard voice calls. The east African nation has a very limited Tele-communications industry.