MTN Is Said to Be Talking to Buyers for Afghan Wireless Unit
(Bloomberg) -- MTN Group Ltd. is in talks with potential international buyers for its wireless business in Afghanistan, a bid to accelerate plans to exit the country, according to people familiar with the matter.
Africa’s biggest mobile-phone operator, the market leader in Afghanistan with a 40% share, is in discussions with several parties, said the people, who asked not be identified as the negotiations are ongoing.
MTN announced just over a year ago a plan to exit countries in the Middle East over the medium term, enabling the Johannesburg-based company to focus on African markets. The carrier has since abandoned its operation in Syria, citing regulatory demands that made operating there untenable, though said last month it’s still evaluating options in Yemen and Afghanistan.
The carrier declined to comment on market speculation.
Telecom companies operating in Afghanistan, which also includes Etisalat of the United Arab Emirates, have reassured customers and investors they are keeping services running following the collapse of the U.S.-backed government last month, while trying to secure the safety of their employees in the country.
The Taliban unveiled a new government on Tuesday, and have said investments from China will be essential to rebuilding an economy ravaged by 20 years of war. Internet penetration in the country is still low at 22%, while just over a third of the population had mobile-phone connections at the start of the year, according to analysis by DataReportal.
None of the potential bidders are currently from China, the people said.
MTN shares have been on a tear this year, more than doubling in value. The stock traded 2.4% lower as of 4:08 p.m. in Johannesburg on Wednesday.
A writedown of MTN’s Afghanistan business without any proceeds from a disposal would cost about 700 million rand ($49 millon), the people said. Other operators in the country include state-owned Afghan Wireless and Roshan, a joint venture between Monaco Telecom SAM and a Swiss development agency, as well as Etisalat.
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