South Africa’s MTN denied rumours that it plans to delist from the JSE and move its headquarters to Dubai.
The rumours were published by local website ITWeb, which shows that MTN has been quietly moving its technical operations to Dubai and claims,…
South Africa’s MTN denied rumours that it plans to delist from the JSE and move its headquarters to Dubai.
The rumours were published by local website ITWeb, which shows that MTN has been quietly moving its technical operations to Dubai and claims, citing sources, that its technology development division would follow.
MTN confirmed that the technical operations had moved to Dubai but denied the rumours of a South Africa exit.
MTN “would like to strongly refute the mischievous speculation that it intends to ‘abandon’ South Africa and delist from the JSE,” spokesperson Nozipho January-Bardill said in a statement.
“The Group has operations in more than 24 countries, including those in which it has mobile licenses. However, some departments within MTN Group Management Services are based in Dubai as part of the Group’s ongoing response to the challenges of the changing global telecommunications industry. This is also intended to address the logistical challenge of supporting the operations in the Middle East, in particular, and certain parts of Africa.”
An exit would come with several advantages for MTN. Its status as the golden goose of the JSE, with a 13.5% stake owned by the state’s Public Investment Corporation, has won it the vigilance of the government and regulators. The resulting regulatory environment, in turn, was blamed for the collapse of MTN’s attempt to merge with Bharti Airtel last summer. The negotiations represented MTN’s third attempt to merge with a major Indian operator, and talks were initially rumoured to be going smoothly before the regulatory obstacles set in.
A move would therefore help MTN’s ambition to become a major global operator, also setting it closer to the Asian and Middle Eastern markets that it is keenly eyeing.
In addition, SA has become MTN’s most stagnant market. Faced with saturation and increased competition – with Telkom soon to enter the sector too – MTN saw its customer base slump last year. Additional efforts to increase its distribution network – a key focus as it sought to compete with Vodacom – failed when a deal to acquire prime retail space from Musica fell through.
However, the government’s attachment to MTN also questions whether a move would be easily done is a different matter.
