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MTN faces challenges in Iran, Syria, Yemen

Countries are strategic to telco's expansion

Economic sanctions and political unrest in Iran, Syria and Yemen are frustrating MTN's efforts to import network equipment to improve service levels and expand networks in these countries.

The three country countries are strategic to MTN's expansion program in the Middles East, as they have played an important role in helping the company expand.

MTN CEO and President Sifiso Dabengwa said the operator, based in South Africa, was also finding it difficult to move money in and out of Iran because of the sanctions.

Dabengwa was tightlipped as to how much MTN intends to invest in Iran and Yemen this year, because he said the company is still working out ways of moving money into these countries outside the traditional banking system. Financial institutions are now prohibited from dealing with these countries, he noted. But last year, the company invested 1.3 billion South Africa rand (US$170 million) in its Iranian network.

Dabengwa said MTN will invest 869 million rand (about $114 million) in Syria this year while 6 billion South Africa rand (about $793 million) will go into other operations.

Iran is currently facing biting economic sanctions from the U.S. and the E.U. over its ambitious nuclear program. The Western countries are accusing Iran of enriching uranium to develop nuclear weapons. Iran denies the accusations, claiming its nuclear program is only for civilian purposes.

Although Iran dismisses the sanctions and claims they have no impact on the country, Dabengwa said at a media briefing last week that, "MTN was feeling the effect of the sanctions as it is now difficult even to import communication equipment into the country."

Dabengwa said business in Iran has remained good and that MTN will continue to be sensitive to international issues while retaining its firm commitment to the country. He said MTN would only pull out of Iran if South Africa joined the U.S.-led sanctions because the company is guided by South African policies internationally, in the same way that U.S. companies are prohibited from doing business in Iran.

The U.S. government has the Syrian regime and Syrian President Bashar al-Assad under sanctions. The Syrian government is clamping down on protesters who are pushing for Assad to step down. The E.U. has also imposed economic sanctions on Syria, which among other things block cargo planes operated by Syrian carriers from E.U. airports.

Several months of antigovernment protests aimed at dislodging the government have also paralyzed Yemen, pushing it to the brink of civil war.

"Political unrest in the Middle East remains our concern as there has been an impact on our business. MTN will continue to monitor the situation," Dabengwa said.

 Currently, MTN is the largest mobile operator in Africa, with operations in 21 countries in Africa and the Middle East including Zambia, Ghana, Uganda and Rwanda, Iran, Syria and Sudan.

Dabengwa said the MTN's Iran cell venture, in which it holds a 49 percent stake, added four million subscribers to its existing 34.6 million last year.


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