MTN’s CEO Sifiso Dabengwa. Picture: FATI MOALUSI
The MTN Group is fighting an unprecedented “war” in Iran on two fronts and analysts on Tuesday warned that the international operator’s options were growing thin and pulling out would have crippling effects on its bottom line.
Headquartered in South Africa, MTN is facing growing international pressure – the US and EU being the loudest – urging the operator to exit Iran, which they regard as a pariah state.
MTN Iran is the third largest profitable operation of the 22 countries in which the company operates. The telecom group has a 49% stake in Iran’s second-largest mobile phone operator and derives 30% of its subscriber base from Iran.
Telecoms analyst Chris Ngwenyama, at research firm Africa Analysis, said the operator was in a “fix”.
“I don’t think they are in a position to exit Iran now. They have cash they can’t repatriate right now. It’s a lucrative operation and, looking at subscriber numbers, they would like to stay in Iran,” Ngwenyama said.
MTN has become the US’s latest target in its quest to isolate Iran under the group United Against Nuclear Iran, which has sent letters to the company and US Congress soliciting support to pressure MTN to exit the oil-rich Middle Eastern country.
Varied accusations have been levelled against MTN, with the group saying the operator was aiding the Iranian government to track phone users, accusations dismissed by MTN.
Mervyn Miemoukanda of Frost & Sullivan echoed the view that MTN was in a fix.
“It’s a tricky situation. Iran is a profitable base. The best option is to remain in Iran, pulling out will have detrimental effects,” Miemoukanda said.
“On the other hand, SA is a key ally of the US and EU and has to co-operate with them and abide by their agreements.”
Sifiso Dabengwa, MTN president and CEO, recently said that the US government wasn’t putting direct pressure on MTN but was doing so on some of its partners, especially banks with which it does business. MTN, until the middle of last year, used banks in Dubai to get money in and out of Iran.