Joy Agwunobi
MTN Group, one of Africa’s largest telecommunications companies, has announced its decision to exit the markets of Guinea-Bissau and Guinea-Conakry, citing financial challenges including high inflation and currency devaluation.
The telecommunications giant made the announcement in its annual financial report for 2023, noting that despite having a large market share in both countries, it has struggled financially in recent years.
In Guinea-Bissau, MTN’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) have been consistently negative, leading to a breach of its loan covenants and a significant loss of R1.69 billion ($89,392,809).
MTN’s decision to exit the Guinea-Bissau and Guinea-Conakry markets is likely driven by the company’s desire to focus its resources on stronger markets that offer greater potential for growth. In particular, the company has cited Ghana, Cameroon, Nigeria, and Cote d’Ivoire as key markets, which together contribute 18.6 per cent of the company’s revenue. This is in contrast to the much smaller percentage of revenue contributed by the remaining West and Central African countries.
In line with its strategy to exit smaller markets in West and Central Africa, MTN has entered into a share purchase agreement with Telecel, one of its competitors, to sell its shares in MTN Guinea-Bissau and MTN Guinea-Conakry. This agreement will allow MTN to focus on its core markets, while Telecel will acquire these businesses and become the sole mobile operator in both countries. MTN hopes that this move will allow it to strengthen its financial position and improve its overall performance.
In its report, MTN emphasised its commitment to ensuring a smooth transition process for all stakeholders in Guinea-Bissau and Guinea-Conakry as it exits the markets. This includes ensuring that customers continue to have access to high-quality services, and that employees are treated fairly throughout the process.
MTN believes that the acquisition by Telecel will provide a strong foundation for future growth and development in the two countries, and will have a positive impact on the wider economy.
