MTN puts Iran expansion plan on hold due to Donald Trump’s sanctions
MTN Group’s $750m plan to extend fibre-to-home broadband connections to Iranian cities has been put on hold because of looming economic sanctions imposed by US President Donald Trump, say people familiar with the matter.
A plan devised a year ago for Africa’s largest wireless carrier to buy a stake and extend loans to state-owned broadband provider Iranian Net has made little progress, said the people, who asked not to be identified as the information is not public.
The Iranian government had been unable to contribute funding as it battles to shore up the economy and arrest a currency slump, they said.
MTN would update shareholders on Iran as part of a first-half results announcement scheduled for August 8, according to a spokesman.
It had 43-million customers at the end of 2017, its second biggest market after Nigeria. Iranian Net was founded in 2011 to provide high-speed broadband, but had missed several deadlines due to a lack of capital, according to the sources.
Trump’s decision to withdraw from an international nuclear deal with Iran and reimpose an embargo on energy and financial sectors is proving a headache for MTN and other international companies. Under previous sanctions lifted following a 2015 deal, the wireless carrier had about $1bn stuck in the country, which it only managed to repatriate in 2017.
Under new CEO Rob Shuter, MTN has vowed to exit or sell markets it sees as more trouble than they are worth, and disposed of its tiny Cyprus business in July.
However, Iran’s size makes it likely the South African firm will see out the impasse, given the importance placed by MTN on its three biggest markets, which includes SA.
“MTN conducts business in some jurisdictions where socio-political-economic conditions are very volatile and difficult to predict,” said Ron Klipin, a money manager at Cratos Capital. “Iran, Nigeria and Yemen remain difficult areas of operation, which could impact on MTN’s financial results due to major currency volatility and lack of liquidity.”