Economy, Sci & Tech

MTN Boosted by End to Iran Sanctions

MTN Boosted by End to Iran Sanctions
MTN Boosted by End to Iran Sanctions

MTN, the part owner of MTN-Irancell, increased 2.3% to R120.50 on Monday on news that sanctions against Iran have been lifted, a move that would free up more than $1 billion in frozen accumulated dividends.

While good news for the South African cellphone company, the share prices of oil producers across the world fell on the prospects of Iran flooding an already oversupplied market, BD Live.

Sasol fell 3.78% to R363, while its Brazilian counterpart Petrobras fell to a 13-year low and Nigerian equities fell to a three-and-a-half-year low.

MTN, which owns 49% of unlisted Irancell, the country’s second-biggest cellphone operator by subscribers, has been restricted from repatriating money from the unit due to the sanctions.

The telecoms operator said in August last year it hoped to repatriate about $1.1 billion in accumulated dividends frozen by international sanctions once Iran’s nuclear deal with world powers was finalized.

MTN spokesman Chris Maroleng would not comment.

While initially good news for MTN, the reopening of Iran to international trade may see additional competition arriving.

Kaan Terzioglu, the chief executive of Turkey’s largest cellphone operator, said on Monday Turkcell is looking for acquisition opportunities to expand regionally and Iran could be a target market, as sanctions against Tehran are lifted.

“Iran is a huge market and in our focus. We are closely watching the Iranian market and in touch with all of its fixed line and mobile operators,” he said.

Turkcell has had a longstanding interest in Iran. In 2004, it led a consortium that won a mobile license in Iran that was later given to a rival group headed by MTN Group. It later tried to sue MTN in a US court, but eventually dropped that suit.

Like many mobile operators, Turkcell is looking to reposition itself as a telecom services firm by increasing revenues from data, television and music services. Through acquisitions, it is hoping to source as much as 40% of its revenue from overseas, from about 9% now.

Orange SA, France’s largest mobile operator, has also showed interest in Iranian telecoms companies, namely Mobile Communications Company of Iran otherwise known as Hamra-e-Aval locally, according to an unnamed source close to the matter.