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PROBLEM OF SCALE

Africa’s largest mobile network may disconnect from parts of West Africa

Lynsey Chutel
By Lynsey Chutel

Reporter

MTN became Africa’s largest telco by entering markets that had been overlooked. Now, weary after losses and scandals, MTN is reconsidering is apparently reconsidering its presence in West Africa.

The speculation began last week, after MTN announced the sale of its Cyprus unit for just over $305 million to Monaco Telecom. MTN Cyprus was the company’s only presence in Europe, and “falls outside the group’s core footprint of Africa and the Middle East,” MTN said in the sale announcement.

It was the first time MTN had exited a country in its 24-year history and hint that the company may be scaling back after several years of strain. CEO Rob Shuter is said to be reviewing MTN’s portfolio and whether it really needs to be in 22 countries, according to a report by Bloomberg.

West Africa seems to be next, according to the report. Liberia, Guinea and Guinea-Bissau could be on the chopping block, according to the report. Liberia and Guinea-Bissau had the lowest number of subscribers after Cyprus.

Earlier this year, MTN had to pay regulators in Benin $126 million to settle a licensing dispute. Then in Cameroon, it paid a $6.6 million penalty ahead of renewing its license there. In Ghana, MTN agreed to sell shares to local investors in exchange for a with regulatory requirements for a new 4G license, reported Bloomberg. And of course, MTN’s woes in Nigeria are well-documented.

It seems the headaches in smaller markets just aren’t worth it. Instead, MTN is said to be reprioritizing to take advantage of larger markets like Angola and Ethiopia, where in both cases state-owned telcos are reportedly planning to sell off a stake.

“In line with internal corporate governance, as well as [Johannesburg Stock Exchange] requirements, MTN does not comment on market speculation,” the group responded to Quartz on July 23.