This is part of the company’s plans to accelerate its exit from the Middle Eastern country.
The South Africa headquartered company is currently the market leader in Afghanistan with a 40% share and is in discussions with several parties in ongoing negotiations to sell its Afghanistan arm. A writedown of MTN’s Afghanistan business without any proceeds from disposal is estimated to cost about R700 million ($49 million) according to undisclosed sources familiar with the negotiations.
This move is in line with MTN’s announcement just over a year ago to exit countries in the Middle East over the next three to five years, in order to focus on African markets. The carrier earlier this year abandoned its operation in Syria, citing regulatory demands that made operating there untenable; last month the carrier stated that it was still evaluating options in Yemen and Afghanistan.
The sale of its Afghanistan unit is crucial to MTN as it plans to raise about R15 billion ($1 billion) from shareholding sales in markets outside Africa. The proceeds will be used to reduce its huge debt of nearly R50 billion ($3.5 billion) for the year to December 2020 as well as allocate more capital investments in Africa by 2025.
Unlike MTN, the other telecom companies operating in Afghanistan, which also includes state-owned Afghan Wireless and Etisalat of the United Arab Emirates, have reassured customers and investors that services will keep running following the collapse of the US-backed government last month while trying to secure the safety of their employees in the country.
MTN currently serves over six million customers in Afghanistan, its planned exit could serve as an opportunity for other Afghanistan telecom players to expand their market share, while MTN does the same in Africa.