MTN's Iran expansion plans facing delays because of Trump sanctions
MTN Group has decided to delay a $750 million fibre-to-the-home expansion plan in Iran because of upcoming economic sanctions set to be imposed by the Trump administration.
MTN was set to buy a stake in state-owned broadband provider Iranian Net as well as extend loans that could have been used to boost infrastructure investment, but these plans have made little progress, according to several reports.
Iran is MTN’s second biggest market by subscriber number, but President Donald Trump’s decision to withdraw from an international nuclear deal with Iran that was struck by predecessor Barack Obama is likely to see sanctions imposed on the country.
Bloomberg, citing unnamed sources, said MTN had put plans on hold. The sources also said that the Iranian government, which is under pressure to shore up the country’s economy following a currency slump, hasn’t been able to contribute funding.
The report claims MTN previously had around $1 billion stuck in the country when the previous US sanctions, lifted as part of the 2015 deal, were in place. It managed to repatriate the money last year, Bloomberg said.
Iran’s telecoms market is primarily state-owned, dominated by the Telecommunication Company of Iran, which was forced to open up its network to local rivals for wholesale. It has proven a problem market for some international companies, most notably Chinese vendor ZTE which has been heavily sanctioned for selling in Iran while sanctions were live.
With the return of sanctions looming, MTN, which operates in Iran through MTN Irancell, will face questions over its plans. The company said it will update shareholders during an earnings call scheduled for next week.
It comes as MTN has began offloading or looking to offload a number of non-core assets – most recently its Cyprus operation, which was sold to Xavier Neal.
Citing sources close to the matter, a separate Bloomberg report claims the African mobile company is considering options for a number of West African business units, with those in Liberia, Guinea and Guinea-Bissau potentially facing a sale.
The report says that MTN CEO Rob Shuter is leading a review of the African firm’s operations, which fits with an announcement he made in March which said he was assessing the 22 markets MTN currently operates in. Shuter has said the focus is on exiting markets that could be troublesome, either due to size or regulatory issues. It remains to be seen what MTN will do with United States banking sanctions due to be reintroduced on Iran next week.