MTN to acquire 49% stake in Iran Net for USD295 million

iran net

South Africa-based MTN Group said it will invest about USD295 million in Iran Net in order to acquire about 49% stake in the fixed line broadband company.

According to Reuters News Agency, the proposed deal is to further MTN’s interests in the Iranian telecoms market that have opened up to foreigners following the lifting of international sanctions, which has also allowed MTN to repatriate $1 billion in accumulated dividends from its 49 percent stake in wireless network operator Irancell.

The latest agreement, which is still at a non-binding stage, is the second for MTN in Iran this year after Africa’s biggest wireless networks group invested in Iran Internet Group, which runs a car-hailing app called Snapp.ir.

As a breakdown of the deal, MTN Group disclosed that it will pay ZAR540 million which is approximately USD40 million to buy a 49 percent stake in Iranian Net and with an additional investment of ZAR3.4 billion in both equity and loans to help the Iranian company develop a fibre network over the next five years.

“This investment, should it be completed, represents an opportunity to capitalise on the continued strong growth expected in the Iranian broadband market, with an initial focus on eight of the main cities,” MTN spokesperson told Reuters.

MTN will be looking at increasing its revenue which has come under pressure after the company was fined NGN330 billion in Nigeria. Lack of growth and shrinking revenue in South Africa makes it expedient for the company to look for organic growth outside of its home turf as well as Nigeria where over 40% of its revenue is generated.

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