Demographic Dream

MTN’s growth focus shifts to Nigeria after Ethiopia, Syria exits

By David Whitehouse

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Posted on August 17, 2021 10:08

Men sit on motorbikes in front of advertising posters for MTN telecommunication company along a street in Lagos © Lagos, August 2019. REUTERS/Temilade Adelaja
Lagos, August 2019. REUTERS/Temilade Adelaja

MTN’s withdrawal from Ethiopia and Syria means that Nigeria will become even more important as a driver of the company’s growth.

Analysts see strong potential in data and fintech, while cautioning on currency and regulatory risks.

Last week, the South African company said it won’t bid again for a telecoms licence in Ethiopia, despite the carrot of the right to offer financial services. It will also exit Syria where CEO Ralph Mupita says conditions have become “intolerable.”  The company is also looking at options of leaving Yemen and Afghanistan.

In 2020, Nigeria accounted for 29% of MTN’s subscriber base and around 30% of revenue and earnings. Analysts see bright prospects for growth. Chapel Hill Denham in Lagos raised its 12-month price target for MTN Nigeria by 33% to N238.72 ($0.58) on August 13.

The firm recommends MTN Nigeria as a ‘buy’ and says the stock is cheaper relative to earnings before interest, taxes, depreciation and amortisation (EBITDA) than rivals such as Vodacom and Safaricom.

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