Rob Shuter’s parting gift to MTN as its outgoing group CEO will be to facilitate the early stages of the company’s exit from the Middle East to focus on its home continent of Africa.
MTN, a South African company founded in 1994, has become the second company – after Shoprite – to announce this week that it is retreating from markets outside South Africa that have helped it become the largest mobile operator in Africa and eighth in the world. Shoprite, one of the first South African companies to expand into Nigeria, is pulling out of the country after 15 years because it has become a tough economic environment to operate in.
The Middle East operations are small, contributing less than 4% of MTN group earnings before interest, taxation, depreciation and amortisation of R41.8-billion in its financial results for the six months to end-June 2020. Ebitda is a key earnings metric that reflects a company’s operational performance. Meanwhile, MTN Syria contributed 0.7% to MTN group’s Ebitda.
Recently, MTN was accused of paying the Taliban to protect its infrastructure in Afghanistan, violating US anti-terrorism laws in the process. Families of US service members and civilians, who have been killed in Afghanistan, launched a legal complaint against MTN in a US court. MTN wants the complaint to be dismissed, but it will be a herculean effort to do so as the US has upped its ante on anti-terrorism laws in recent years.
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