MTN has confirmed that it is one of several applicants for a licence to operate in the south-east Asian state of Myanmar.
If MTN won the bid it could be required to invest between $200 million (R2 billion) and $300m to launch a greenfields operation in that country, MTN group chief executive Sifiso Dabengwa said yesterday.
Dabengwa said Myanmar, a country with a population of slightly more than 60 million and cellphone penetration of less than 5 percent, was an “excellent opportunity”.
Dabengwa said the quality of communications in Myanmar was poor and the geographical terrain presented challenges for the roll-out of infrastructure due to high levels of water and mountainous regions.
Dabengwa said bidders had submitted expressions of interest and the process was now at a stage where the bid requirements were being outlined.
Between 10 and 15 candidates would be shortlisted from a list of about 90 bidders and a licence awarded by June.
Dabengwa said it was unclear whether the Myanmar government would require a candidate to partner with the incumbent Myanmar Post and Telecommunication.
Spiwe Chireka, a manager at market researcher International Data Corporation, said: “It has been no secret that Asia is one of the markets MTN would readily consider should opportunities present themselves, and I believe this may be the start of another wave of expansion into this region similar to what MTN did in Africa between 2000 and 2004.”
Chireka said South Africa and Nigeria, in real terms, were still the largest opportunities for MTN, but other markets such as Uganda and Ivory Coast were growing.
“It is therefore likely that MTN will increase its focus on these markets and be looking to capitalise on these high-growth markets, whether it be in terms of consolidation-driven merger and acquisition or increased resource input to drive the ongoing growth,” she said.
MTN said yesterday that revenue for the year to last December grew 10.9 percent to R135bn and subscribers increased 15.1 percent to 189.3 million.
Adjusted earnings a share climbed to R10.89 from R10.69 a year earlier, MTN said. That missed the R11.67 median estimate of 12 analysts.
Exchange-rate moves, including declines of the Syrian pound, Iranian rial and Sudanese pound against the rand, had curbed adjusted earnings a share by R1.79, said MTN, which operates in 22 African and Middle Eastern markets.
Capital spending increased by 70 percent to R30.1bn as MTN upgraded networks to handle more data traffic as consumers access the internet from mobile devices.
Dabengwa said MTN had secured a licence to provide value-added and SMS-based services in Ethiopia and the company would also roll out its content portal MTN Play.
The company was continuously reviewing the Syrian market and a consideration to exit that market when the licence expired in 2017 was part of discussions, Dabengwa said.
Shares in MTN retreated, dragging JSE benchmarks lower, after the index heavyweight’s full-year profit fell short of expectations.
After big gains in the previous session, investors were taking a more cautious tack, market players said.
“MTN’s results were definitely worse than expectations,” Abri du Plessis, the chief executive of Gryphon Asset Management, said. “In the past month, profit announcements by most companies locally were quite a disappointment. It tells you the economy is not in great shape.”
MTN shares closed 1.26 percent lower at R177.33. – Additional reporting by Bloomberg