Africa’s largest mobile operator, MTN, is stuck with more than US$550 million in Iran because of U.S.-led sanctions, and is working with officials internationally to come up with solutions to repatriate the assets.
MTN has a 49 percent share in Irancell, owned and controlled by the Iranian Electronic Development Company. The company said it is in talks with U.S. authorities, including Treasury Department officials, to try to find a solution that will allow it to get assets out of Iran.
Sanctions have made it difficult for any company doing business with U.S. countries to take assets out of Iran. MTN Group CEO Sifiso Dabengwa said the company has not been able to repatriate money out of Iran since last year when the new rounds of sanctions were imposed by the U.S. and the European Union (E.U.) over Iran’s nuclear program.
The U.S. and other Western countries believe Iran is enriching uranium to levels that could be used in nuclear weapons. Iran denies the accusations, claiming its nuclear program is only for civilian purposes.
Iran is strategic to MTN’s expansion program in the Middle East as it has played an important role in helping the company invest in Yemen. The sanctions are also frustrating MTN’s efforts to import networking equipment to improve service levels and expand its network in the country.
Iran is MTN’s second largest operation, with over 40 million subscribers.
Although Iran dismisses the sanctions and claims they have no impact on the country, Dabengwa said during an address to the media after presenting the company’s financial results this week that, “the company was feeling the impact of the sanctions.”
Dabengwa said MTN wants to repatriate about $400 million in loans, which the telecom company received from lending institutions to support its expansion and between $150 million and $200 million in dividends.
Dabengwa said business in Iran has remained good and that MTN would only pull out of Iran if South Africa joined the U.S.-led sanctions because the company is guided by South African principles internationally, in the same way that U.S. companies are prohibited from doing business in Iran.
In the first quarter of this year, Dabengwa said MTN invested over $44 million in Iran, although there have been project delays.
Meanwhile, MTN has said it will not pull out of Syria because of the political unrest that has degenerated into a civil war.
Dabengwa said the company will continue to operate in Syria and maintain services as best as possible.
“Clashes between opposing factions are having a negative effect on MTN’s ability to keep operations running. At any given time, up to half of our sites are down,” Dabengwa said.
The U.S. government also 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.