MTN Plans To Retract Trapped Iranian Funds

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VENTURES AFRICA – Africa’s biggest mobile phone company, MTN Group is seeking the help of the South African government and the U.S. in getting its funds out of the oil-rich country, as US-led sanctions on Iran has made it difficult for company to retract its earnings in the oil-rich gulf country for the last six months.

Iran’s nuclear programme has attracted sanctions from international entities, restricting business transactions with the widely criticized Arab state.

Just recently, Standard Chartered Bank made international headlines for allegedly helping the Iranian government in transactions worth $250 billion.

MTN, which reported a 30 percent surge in first-half profit, indicated Iran’s rial could devalue because of the sanctions, with a devastating effect on its second-half profit.

According to a Reuters report, Mervin Miemoukanda, a research analyst at consulting firm Frost & Sullivan said: “The Iran issue is going to have a detrimental impact on MTN’s future in terms of revenues.” He added, “With all the uncertainty around Iran, the future is not bright in terms of revenues and subscribers.”

MTN’s subscriber-base in Iran jumped more than 10 percent, to over 38 million, accounting for 22 percent of the telecom group’s 176 million customers. 10 percent of its total earnings is generated from MTN Irancell, where it owns a 49 percent stake.

“I don’t think they are prepared to lose 20 percent of their customer base. They will find ways of continuing to operate in Iran – even if it’s tough,” said Frost & Sullivan’s Miemoukanda.

On Wednesday, MTN Group posted a 14 percent rise in its adjusted headline earnings.

In Nigeria, MTN’s biggest market with a subscriber base of about 40 million, the telecommunications regulatory body, Nigerian Communication Commission (NCC) imposed a $7.3 million fine on MTN and three other mobile operators for poor quality service.