MTN sells business units in Guinea-Bissau, Guinea-Conakry to Telecel

Telecel Group has bought two West African units from Africa’s largest wireless company MTN Group, as it scales operations ahead of an initial public offering in three years. This follows Telcel’s acquisition of Vodafone Group’s operations in Ghana last year.

The Africa-focused telecommunications company is buying MTN’s debt and equity in Guinea-Bissau and Guinea-Conakry, Chief Executive Officer Moh Damush said in an interview with Bloomberg, without disclosing the size of the latest acquisitions.

Recall that Telecel Global Services raised $20 million in February 2024 from the Africa Credit Opportunities Fund (ACOF), a private credit fund. The purpose of the fund was to enable Telecel Group to expand its services in West Africa.

Telecel is looking at two other prospects on the continent and the “next round of acquisitions will focus on financial services and tech companies that can add value to our investments,” CEO Damush told journalists.

Damush and partners Hugues Mulliez and Nicolas Bourg acquired Telecel in 2017. The firm has interests in several markets such as Ghana, Central Africa Republic and Liberia. The CEO also indicated that more than financing from shareholders, Telecel is raising money from Africa-focused funds, banks, and equity investors for the acquisitions.

“Dubai and London seem to be our preferred options for a listing,” Damush said. “We are also interested in further developments in the next years that would allow considering African bourses.”

For MTN, profitability is key

Earlier reports confirm that MTN agreed to the sale of its equity interests in MTN Guinea-Bissau and Guinea-Conakry, as it looks to exit smaller markets in the West and Central Africa (WECA) region. This follows the release of its 2023 financial reports.

According to the report, MTN’s Guinea-Bissau and Guinea-Conakry businesses have been classified as held for sale as of December 31, 2023. With this sale, MTN will be able to focus on Ghana, Cameroon, and Cote d’Ivoire as well as stronger markets in the West and Central Africa region.

The challenging operating environment in 2023, marked by rising inflation, currency devaluation, and foreign exchange shortages, posed significant headwinds for MTN in Nigeria, its biggest market in Africa. Nigeria’s inflation rate rose by 28.9% in December 2023, the highest in 18 years, with an average rate of 24.5% throughout the year. These factors contributed to the depletion of retained earnings and shareholders’ funds to a negative N208.0 billion and N40.8 billion, respectively.

CEO, Ralph Mupita told journalists on Monday that the company is in talks with regulators across several markets, including Nigeria, to get approval to increase tariffs for voice and data.

“Given our expense profile in Nigeria, we need some tariff increases to mitigate the cost of running the networks. Our focus is to work with regulators for tariff increases in voice and data as there haven’t been any increases for quite some time in that market,” Mr Mupita said.

Read more: FX challenges: MTN plans to hike tariff in Nigeria to boost profitability

MTN appoints Mike Silber as group regulatory executive

In similar news, MTN has appointed Mike Silber as Group Executive Regulatory Officer from 1 April 2024. Silber joins MTN from Liquid Intelligent Technologies, where he was the group chief regulatory officer for five years.

According to MTN, Silber was instrumental in helping create and expand the most extensive cross-border fibre network in Africa while he was at Liquid.

He also helped build and expand the continent’s largest networked data centre operation at Liquid subsidiary Africa Data Centres.

Silber holds B Proc and LLB degrees from the University of the Witwatersrand and has over 25 years of experience in the telecommunications and Internet sectors.

His extensive experience includes serving on the boards of several industry bodies, such as the ISP Association of South Africa and the Internet Corporation for Assigned Names and Numbers (ICANN).

Silber is also an associate of the LINK Centre at Wits.