Telecom company rightly scales back emerging-market ambitions by withdrawing from Middle East
A sharper focus on its home continent could be just what MTN needs to reclaim its position as Africa’s second most valuable mobile phone company.
Bar the Covid-19 impact, which is widely accepted as a black swan event, Standard Bank CEO Sim Tshabalala’s pivot back to Africa is paying off. In the 2019 financial year, the leadership team at Africa’s biggest lender by assets held up operations outside its home market as the bright growth spot. It makes sense for MTN to refine its strategy and pull the plug on markets that have proven more trouble than they are worth. Until last week it seemed committed to its emerging-market strategy, and few would have thought it was about to exit Iran, its third-largest market.
Furthermore, legal battles in the Middle East have not only tested the commercial logic of keeping some of these businesses but MTN’s reputation as the poster child of SA’s postapartheid commercial success has been tarnished. As Iran is subject to US sanctions, MTN is unable to repatriate its share of the earnings from the joint venture.
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