Why MTN sold one of its most profitable divisions
Sale of healthy Cypriot business will generate R4bn, which MTN will use to reduce its debt
MTN’s profitable little Cypriot business has become the first casualty of the group’s portfolio review process.MTN Cyprus, bought in 2006 as part of a broader transaction, was always something of an anomaly in the emerging-markets group. MTN has now agreed to sell it for just over R4bn to Monaco Telecom.Its only operation in Europe, MTN Cyprus generated average revenue per user (Arpu) of $19.53 a month in the fourth quarter of 2017 — nearly three times what the group made per subscriber in its next-best markets."MTN Cyprus is a nice little business and our team has really done a good job of getting a good performance out of it over the past few years," MTN CEO Rob Shuter said this week.Earnings before interest, tax, depreciation and amortisation (ebitda) rose 9.8% to R595m in 2017 — making Cyprus the third-fastest-growing market in MTN’s portfolio of 22 countries last year.But it is a tiny operation and the scope for further growth is relatively limited. More than one in three Cypri...
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