MTN Eyes Ethiopia Entry as Country Prepares to Open Market

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Bloomberg

Rob Shuter on May 29. Photographer: Chris Ratcliffe/Bloomberg

MTN Group Ltd. has identified Ethiopia as a rare new market into which Africa’s largest wireless carrier wants to expand.

“There are a few large markets that are under-penetrated and where there is scope for a No. 1 or No. 2 operator, like Ethiopia,” Chief Executive Officer Rob Shuter said in an interview at Bloomberg’s London office. “That’s obviously one where we would be really excited to participate, in some way.’’

The move would fit with the Shuter’s focus on markets in which the carrier can be a major player, and where there’s an opportunity to seize on a consumer shift to mobile banking and other data services from voice. He’s been pulling MTN out of regions that don’t fit that strategy and is looking to sell holdings where it doesn’t have a controlling stake.

Shares of MTN were up 2% as of 9:19 a.m. in Johannesburg.

Asset Disposals

MTN began a review of its markets across Africa and the Middle East last year, leading to sales of its Cyprus business and its share of a joint venture in Botswana. The company has also identified various e-commerce assets and stakes in towers businesses for disposal, and this week announced the sale of its interests in investment fund Amadeus and flight-booking site Travelstart to HarbourVest Global Private Equity Ltd. for 1.2 billion rand ($81 million).

Ethiopian Prime Minister Abiy Ahmed said last year he is looking to bring in private investors to the country’s telecommunications sector for the first time, prompting interest from operators keen to tap into Africa’s second-biggest population and one of its fastest-growing economies. The Horn of Africa nation is currently dominated by Ethio Telecom, a state monopoly. Vodacom Group Ltd., MTN’s Johannesburg rival, has also shown an interest.

MTN began a review of its markets across Africa and the Middle East last year, leading to sales of its Cyprus business and its share of a joint venture in Botswana. The company has also identified various e-commerce assets and stakes in towers businesses for disposal, and this week announced the sale of its interests in investment fund Amadeus and flight-booking site Travelstart to HarbourVest Global Private Equity Ltd. for 1.2 billion rand ($81 million).

 

Shares of MTN were up 2% as of 9:19 a.m. in Johannesburg.

Asset Disposals

A stake in IHS Towers Ltd. is also on the market, while MTN is the biggest shareholder in U.S. listed Africa-focused internet group Jumia Technologies AG, another e-commerce asset.

“We have about one third of our capital in assets that we’ve identified as not long-term strategic,’’ Shuter said.

A major priority for MTN is to concentrate on its biggest markets, including Nigeria. While the carrier has been dogged by regulator and government disputes in Africa’s most populous nation, it’s reaped the benefits of being the industry leader with about 60 million customers.

“There are not that many opportunities for MTN to increase its scale in Africa because we are already in the two large, a lot of the medium and some of the smaller markets,’’ Shuter said.

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