MTN puts Iranian investment on ice as US embargo looms

MTN puts Iranian investment on ice as US embargo looms

MTN has stalled its plans to invest $750 million in Iran in the face of possible US sanctions on the market.

According to Bloomberg, the South African group has for at least a year been planning to build out fibre connectivity to a number of Iranian cities. The group is due to announce its H1 2018 results on 8th August, and will brief shareholders on its plans at this time.

Last year, MTN announced plans to acquire a stake in Iranian state-owned broadband firm Iranian Net and extend loans to the firm, which was formed in 2011. However, these plans have been stymied by a lack of funding from the country’s government, which is attempting to prop up Iran’s economy in the wake of a currency slump.

The USA’s recent decision to withdraw from a global nuclear agreement with Iran has been deeply troublesome for a number of international firms operating in the market – particularly as the move was followed by further plans to reinstate a trade embargo on the energy and finance sectors.

While MTN CEO Rob Shuter has stated that the firm will attempt to exit problematic markets – it recently shuttered its operations in Cyprus – MTN has a large-scale operation in Iran with 43 million subscribers at the end of 2017, meaning a full market exit is unlikely. Iran is MTN’s second largest market after Nigeria.

MTN entered the Iranian market in 2013, but its time operating in the Middle Eastern country has been marred by a longstanding legal dispute with Turkcell. The Turkish firm alleges that MTN won the tender process by committing “unlawful acts”, and is claiming damages of $4.2 billion after it missed out on the licence.

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