MTN Group

MTN Group
Public company
Traded as JSE: MTN
Industry Telecommunications
Founded 1994
Headquarters Johannesburg, South Africa
Key people
 Phuthuma Nhleko
(Executive chairman), Rob Shuter
(Chief Executive Officer)
Products GSM-related products
Internet services
Revenue Increase US$ 15.432 billion (2015)
Increase US$5.22 billion (2015)
Increase US$3.345 billion (2015)
Total assets Decrease US$13.762 billion (2015),
Total equity Increase US$12.433 billion (2015)
Number of employees
 17,509 (2010)
Website mtn.com
MTN mobile shop in South Africa

MTN Group, formerly M-Cell,[1] is a South Africa-based multinational mobile telecommunications company, operating in many African, European and Asian countries. Its head office is in Johannesburg.[2] As of 30 June 2016, MTN recorded 232,6 million subscribers across its operations.[3] Although MTN operates in over 20 countries, One-third of its revenues come from Nigeria, where it holds about 35% market share.[4]

The company sponsored the CAF Champions League football competition as well as APOEL FC, winners of the Cypriot First Division in 2009, 2011, 2013, 2014 and participants in the 2009–10 and 2011–12 UEFA Champions League. Beginning in 2017, they are the primary sponsors of the South Africa national rugby union team.

On 18 March 2010, it was announced that MTN signed a sponsorship deal with English football club Manchester United F.C.[5] In March 2016, MTN Group, LTD appointed Rob Shuter as Chief Executive Officer.[6]

Coverage

MTN acquired Investcom, mainly under the Areeba and Spacetel brands.[7]

As of Q2 2016,[8] MTN is active in:

Country Subscribers
(in millions) 		Note
 Afghanistan 6.482 (formerly Investcom)
 Benin 3.962 (formerly Investcom)
 Botswana 1.798 (operates under the MASCOM brand)
 Cameroon 9.648
 Republic of Congo 2.270
 Cyprus 0.386 (formerly Areeba)
 Ghana 17.579 (formerly Areeba)
 Guinea 2.748 (formerly Investcom)
 Guinea Bissau 0.696 (formerly Investcom)
 Iran 47.316 (operates under the MTN Irancell brand)
 Ivory Coast 8.236
 Liberia 1.443 (operates under the Lonestar Cell brand)
 Nigeria 58.978
 Rwanda 3.989 20% owned by Crystal Telecom Rwanda
 South Africa 29.805
 Sudan 8.814 (formerly Investcom)
 South Sudan 1.055 (formerly Investcom)
 Swaziland 0.919
 Syria 5.837 (see MTN Syria, formerly Investcom)
 Uganda 9.891
 Yemen 5.310 (formerly Investcom, operates under the Spacetel brand)
 Zambia 5.417

Business

MTN's competitors in South Africa include Vodacom, Cell C, Virgin Mobile, and Telkom Mobile.

Talks with Bharti Airtel and Reliance Communications

In May 2008, it emerged that Bharti Airtel, an India-based telecommunications company, was exploring the possibility of buying MTN Group. The Financial Times reported that Bharti was considering offering US$19 billion for a 51% stake in MTN, which would be the largest overseas acquisition ever by an Indian firm.

Talks fell through after a few days and Bharti Airtel pulled out of the proposed deal on 24 May. Two days later, it was reported that another Indian telecommunications company, Reliance Communications, was in talks with MTN for a "potential combination of their businesses". If realised, the estimated worth of the combined entity would have been $70 billion (£35 billion), with 116 million subscribers worldwide.[9][10] On 18 July, the two companies announced that they had mutually decided to end discussions regarding the merger.

Acquisition of Verizon Business South Africa

In June 2008, MTN Group agreed to purchase Verizon Business South Africa, which was a provider of data services to corporate customers in South Africa and four other African countries.[11] The acquisition was completed on 28 February 2009.[12] MTN positioned themselves to provide DSL Broadband services in Africa, particularly South Africa, through its partnership with leading South African ISP, Afrihost.[13][14]

International Carrier Services

On 26 June 2009, MTN Group participated in Belgacom International Carrier Services (BICS), a subsidiary of Belgacom, by merging it with its own subsidiary, MTN ICS. BICS will function as official international gateway for all international carrier services of Belgacom, Swisscom and MTN Group. These companies respectively hold 57.6%, 22.4% and 20.0% of the shares of the company.

Sale of Nigerian Stake

South African holding company Shanduka Group acquired a minority stake in MTN Group's Nigeria business for $335 million in November 2012.[15]

Most Admired African Brand

On 22 October 2015, MTN emerged as the Most Admired and the Most Valuable African brand, valued at US$4,672m, its second award in two years. Brand Africa announced at the 4th Annual Brand Africa 100: Africa's Best Brands gala event in Johannesburg, that MTN is the overall best brand on the continent and reclaims the No. 1 spot as the Most Admired Brand in Africa.

MTN has won a number of brand awards in recent years. These include being named the only African brand in the 2014 BrandZ Top 100 Most Valuable Global Brand ranking, the only South African company on the World Champions list and the Most Admired and Most Valuable Brand in Africa, in the 2014 Brand Africa 100 ranking of the most admired and most valuable brands in Sub-Saharan Africa.

Controversies

Iran

MTN has been criticised for its activities in Iran's telecommunications sector. MTN has a 49 percent stake in government-controlled MTN Irancell, the second-largest mobile phone operator in Iran, and 21 percent of MTN's subscriber base is from the country. In January 2012, the US-based advocacy group United Against Nuclear Iran (UANI) launched a campaign publicly calling for MTN to scale back its operations in Iran and end its business in the country. UANI alleges that MTN technology is "enabling the Iranian government to locate and track individual cellphone users which it says is a violation of users' human rights".[16]

In June 2012, Reuters and the BBC reported an allegation by Chris Kilowan, a former executive for the company in Iran, that MTN Group may have been complicit in securing American telecommunications technology from Sun Microsystems, Hewlett-Packard and Cisco Systems on behalf of Irancell, in violation of trade sanctions against Iran. Oracle, which owns Sun Microsystems, said that it was investigating and denied involvement, saying that it complies with US export laws. Hewlett-Packard issued a similar statement. MTN Group denied the allegations, saying that it complied with US sanctions against Iran.[17]

Turkcell court case

Turkey's Turkcell filed a $4.2 billion lawsuit in Washington, D.C., in 2012 alleging the company used bribery to win a mobile licence in Iran that was first awarded to Turkcell. The court delayed the case in October 2012 pending a US Supreme Court decision on the Alien Tort Statute, the US human rights law on which Turkcell's suit is based.[18] In May 2013, Turkcell dropped its multibillion-dollar US lawsuit against MTN Group, citing a US Supreme Court ruling that hurt its case. On 27 November 2013,Turkcell resued in Johannesburg[19][20]

Nigeria $5.2 billion fine

In 2015, the Nigerian subsidiary of MTN was fined by the Federal Government of Nigeria through the Nigerian Communications Commission (NCC) for not meeting the deadline set up by the Mobile network operators (MNOs) for disconnecting over the Subscribers Identification Modules (SIM) with improper registration. The commission exercised section 20(1) of the Telephone Subscribers regulation (TSR) law on MTN, leading to a calculated fine of $5.2 billion, according to the constitution.

The compliance audit carried out by the NCC on MTN network revealed unregistered 5.2 million customers lines were not deactivated as directed. This led to the NCC fining MTN with the sum of $1000 for each unregistered SIM according to the Telephone Subscribers regulation (TSR) law, which amounted to $5.2bn.[21][22]

What followed was major resignations among the top echelon of the organization including the chief executive officer, Sifiso Dabengwa, the Head of Nigeria Operation, Micheal Ikpoki and the Head of Cooperate Affairs, Akinwale Goodluck being replaced with Phuthuma Nhleko, Ferdi Moolman and Amina Oyegbola as new chairman, managing director and Head of Corporate and Regulation respectively.[23]

The new management employed a diplomatic measure between the government of the Republic of South Africa and its Nigerian counterpart to ameliorate the burden of the liabilities from the fine. This action brought about the reduction of the liability to $3.2 billion.[24][25][26]

See also

References

  1. ↑ "M-Cell is Now MTN Group Limited." PR Newswire: 1. 11 October 2002. ProQuest. Web. 11 November 2013 .
  2. ↑ Home. MTN Group. Retrieved on 15 August 2011. "Head Office South Africa" ,"14th Avenue Johannesburg 2196 South Africa"
  3. ↑ MTN Group Limited. "MTN Group Limited - Interim Results for the six months ended 30 June 2016" (PDF). mtn.com. Retrieved 11 December 2016.
  4. ↑ "MTN settles Nigeria fine & looks at listing on the Nigerian Stock Exchange". 11 June 2016.
  5. ↑ "Goal.com". Goal.com. 18 March 2010. Retrieved 22 September 2013.
  6. ↑ Hill, Liezel; Prinsloo, Loni. "MTN Says New CEO Shuter to Join Early as Data Traffic Soars". Bloomberg. Bloomberg. Retrieved 24 October 2016.
  7. ↑ Stewart Bailey (2 May 2006). "MTN Agrees to Buy Investcom for $5.5 Billion in Cash". Bloomberg. Retrieved 25 November 2014.
  8. ↑ "Quarterly update for the period ended 30 June 2016 - Data Sheet". MTN Group. Retrieved 11 December 2016.
  9. ↑ "Exit Bharti, Enter Reliance in MTN Tango", Bloomberg Businessweek
  10. ↑ "India's Reliance Communications plans merger with MTN". The Times Online. Retrieved 22 September 2013.
  11. ↑ "MTN buys Verizon South Africa". TeleGeography. 25 June 2008. Retrieved 22 September 2013.
  12. ↑ "MTN completes purchase of Verizon Business" (Press release). mtn.co.za.
  13. ↑ "MTN Business and Afrihost in ground-breaking partnership". Itweb.co.za. Retrieved 22 September 2013.
  14. ↑ "Company Announcement: MTN Business set to drive innovation into the Business World". Engineering News. 21 November 2012. Retrieved 22 September 2013.
  15. ↑ "Shanduka Group Buys Stake in MTN Nigeria". Wall Street Journal. November 2012.
  16. ↑ "U.S. Lobby Group Seeks MTN Pullout From Iran". The Wall Street Journal. 27 January 2012. Retrieved 23 March 2012.
  17. ↑ Paivar, Amir. "Iran mobile operator Irancell 'secures US technology'". BBC news. Retrieved 6 June 2012.
  18. ↑ "Turkcell withdraws U.S. lawsuit against MTN Group". Reuters. 1 May 2013.
  19. ↑ Archived 2 July 2014 at the Wayback Machine.
  20. ↑ "MTN Group Limited Integrated Report: Year Ending 31 December 2013" (PDF). Mtn.com. Retrieved 12 November 2015.
  21. ↑ Adeyemi Adepetun. "MTN in talks with NCC over N1.04tr fine on telecoms firm". Guardian Newspaper. Retrieved 27 December 2015.
  22. ↑ "MTN CEO Dabengwa Resigns After $5.2bn Nigeria Fine". Thisday Live. Retrieved 28 December 2015.
  23. ↑ Tonye Bakare. "MTN Nigeria CEO resigns as FG slashes fine to N674b". Guardian Newspaper. Retrieved 27 December 2015.
  24. ↑ Emma Okonji. "MTN Shares Plummet for Second Day on NCC Fine". THIS DAY LIVE. Retrieved 26 December 2015.
  25. ↑ "MTN seeks to reduce $5.2bn Nigerian fine". bbc news. Retrieved 27 December 2015.
  26. ↑ Adeyemi Adepetun. "MTN claims N10b expenses on SIM registration". Guardian Newspaper. Retrieved 27 December 2015.
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