SOUTH AFRICA – MTN Group is set to complete the sale and leaseback of South African towers by the end of August 2021, as it also proceeds with the separation of both the fintech and fiber units and strives to pay down debt.

The tower deal could generate as much as R11 billion (US$742.5 million) according to an analysis by Bloomberg Intelligence.

The fintech move is due to be finalised by March 2022 and fibre over the next two years, the firm said in a statement.

Africa’s biggest mobile phone company is more than two years into a transformational breakup project, shedding assets and exiting markets to focus on core businesses around the continent.

 A key aspect is to cease operations in the Middle East, and MTN has abandoned its Syria operation as regulatory demands prevented a more orthodox exit, the group said.

MTN confirmed it is not going to resubmit a bid for a new licence in Ethiopia, which is opening up the market to international operators for the first time.

A previous offer by the carrier and various partners was rejected by the Ethiopian government.

Sales grew by 2.1% in the six months to June 2021, while earnings before interest, tax, depreciation and amortisation rose by 6.6%. The group outperformed in its home market of South Africa, where revenue gained 12%.

The carrier cut debt to R36.7-billion (US$2.48 billion) from about R43.3 billion (US$2.9 billion).

MTN repatriated R7-billion (US$472.5 million) this year from Nigeria, where it has historically been hard to extract cash due to a lack of foreign exchange.  

Despite MTN losing 2.3 million subscribers in the six months ended 30 June 2021 because of new SIM registration regulations in Nigeria, the company still posted a double-digit percentage increase in service revenue in the country, growing much faster than its South Africa operations.

Nigeria suspended new SIM registration by network operators in 2020 as the country’s telecom regulator wanted to do a fresh audit of the SIM registration.

“MTN is more than two years into a transformational breakup project, shedding assets and exiting markets to focus on core businesses around the continent”

It wanted to verify that mobile network operators followed the required standards to register their customers’ SIM cards.

This left MTN scrambling to update SIM registrations on its record and verify ID numbers of more than 37 million of its users.

Nigerian authorities subsequently lifted the ban on new SIM activations in April this year but MTN said the growth of new SIM users remained muted.

The mobile operator said excluding Nigeria, it grew subscribers by 5.4 million.

The group’s total subscriber base stood at 277.3 million people.

“We expect subscriber growth to normalise over time as more of MTN’s enrolment centres in Nigeria are certified for SIM registration,” wrote MTN group president and CEO Ralph Mupita in the results booklet.

But even with subscriber problems in Nigeria, the telecommunications giant still grew its service revenue by almost 20%, and the profitability of its operations kept getting better.

Ironically, Nigeria was one of the markets that delivered double-digit percentage increases in service revenue of 23.8%.

MTN Ghana also delivered a double-digit percentage increase of 25.5%.

The group said all its business units in South Africa recorded good growth, too, posting 9.3% growth overall.

Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE