MTN agrees to US$2 bn Iran deal

JOHANNESBURG – Africa’s biggest cellphone operator, MTN, has agreed to take a stake in a US$2 billion (N$13 billion) project to run Iran’s second mobile firm which would give it a long-awaited foothold in the Middle East, it said yesterday.

But Iran said the hotly contested deal had not been finalised and that only a court ruling would determine for sure whether MTN had muscled out rival Turkcell. Analysts say Iran is a make-or-break deal for MTN, which has been scouring Africa and the Middle East for opportunities to expand its customer base beyond its key markets of South Africa and Nigeria, which are maturing fast.Shares in MTN shot up as much as six per cent, outperforming a firmer Johannesburg top-40 index, and were still trading up 2,7 per cent by 1007 GMT.Shares in Turkcell gained three per cent.”On the face of it Iran is an awesome opportunity that will diversify their portfolio,” said one South African fund manager, who manages a significant stake in MTN.”But we need clarity on the terms of the deal and on whether it is definitely going ahead – and these issues should temper enthusiasm.”MTN said in a statement it had concluded agreements with Irancell shareholders to take a 49 per cent stake in the Iranian company, and had provided a 300 million euro payment guarantee towards a GSM licence.The contract to act as foreign operator in the Irancell consortium for Iran’s second mobile licence was originally awarded to Turkcell but Iran’s telecommunications ministry and the domestic Irancell partners fell out with the Turkish firm over payment of a licence fee and started talks with MTN.Turkcell began court action on October 16 to try to regain its Irancell stake and the outcome is viewed by foreign investors as a litmus test of investment risk in the Islamic republic.Iran’s telecommunications ministry said a final announcement would not be made until the court rules on Turkcell’s complaint.-Nampa-ReutersAnalysts say Iran is a make-or-break deal for MTN, which has been scouring Africa and the Middle East for opportunities to expand its customer base beyond its key markets of South Africa and Nigeria, which are maturing fast.Shares in MTN shot up as much as six per cent, outperforming a firmer Johannesburg top-40 index, and were still trading up 2,7 per cent by 1007 GMT.Shares in Turkcell gained three per cent.”On the face of it Iran is an awesome opportunity that will diversify their portfolio,” said one South African fund manager, who manages a significant stake in MTN.”But we need clarity on the terms of the deal and on whether it is definitely going ahead – and these issues should temper enthusiasm.”MTN said in a statement it had concluded agreements with Irancell shareholders to take a 49 per cent stake in the Iranian company, and had provided a 300 million euro payment guarantee towards a GSM licence.The contract to act as foreign operator in the Irancell consortium for Iran’s second mobile licence was originally awarded to Turkcell but Iran’s telecommunications ministry and the domestic Irancell partners fell out with the Turkish firm over payment of a licence fee and started talks with MTN.Turkcell began court action on October 16 to try to regain its Irancell stake and the outcome is viewed by foreign investors as a litmus test of investment risk in the Islamic republic.Iran’s telecommunications ministry said a final announcement would not be made until the court rules on Turkcell’s complaint.-Nampa-Reuters