IN a strategic move, MTN, the prominent telecommunication giant with a presence in 19 countries across Africa and the Middle East, is contemplating an exit from three African nations – Guinea-Bissau, Guinea-Conakry, and Liberia. A recent report by Business Insider Africa sheds light on the discussions within the company regarding a potential ‘orderly exit’ from these markets.
MTN, a pan-African mobile operator, aims to streamline its operations in response to financial challenges and unspecified issues in the West and Central Africa segment of its portfolio. CEO Ralph Mupita alluded to signs of inflation and currency devaluation across several markets, contributing to the decision-making process.
While specific reasons for the potential exit remain undisclosed, the company’s financial reports for the 2022 fiscal year reveal a decline in the EBITDA margin (profitability ratio) by 1.7 percentage points year on year, reaching 33.1 percent. Pricing pressures, fintech channel subsidies, and macroeconomic challenges, including local currency devaluations and higher inflation, are cited as contributing factors.
According to Bloomberg, these three countries – Guinea-Bissau, Guinea-Conakry, and Liberia – constitute a mere 1.6 percent of MTN’s total revenue in 2022. Despite the relatively low financial impact, MTN controls a significant portion of the telecom market in these nations, with approximately 30 percent market share in Guinea-Bissau and Guinea-Conakry. In Liberia, Lonestar MTN stands as the second-largest telecom provider in the country.
As MTN evaluates its market presence and adjusts its portfolio, the potential exit from these three African countries signifies a strategic realignment aimed at addressing financial challenges and optimising its operations in the evolving telecommunications landscape.