Johannesburg - As President Jacob Zuma concluded a two-day visit to Iran, aimed at bolstering trade relations with his counterpart President Hassan Rouhani, MTN said it would repatriate R15 billion from the Middle Eastern country by June.
Economic sanctions were lifted in January, allowing Iran to re-enter the global economy.
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“The easing of sanctions in Iran and its related economic uplift offers significant opportunities to expand our services in the country, particularly in the digital space where we have a strong market position,” Phuthuma Nhleko, MTN’s group executive chairman, said at the release of its 2015 annual report.
“We are working towards the remittance of R15bn during the first half of 2016,” Nhleko added.
Sanctions were lifted following an agreement between the country and world powers on curbing its nuclear programme for at least a decade.
MTN, which owns 49 percent of Irancell, the Middle Eastern country’s second-biggest mobile service provider, has previously said it will allow the transfer of about $1bn (R14.4bn) in accumulated dividends and a loan repayment from its Iranian unit.
It had been restricted from accessing the money from Iran, as a result of the sanctions imposed by the West.
Turkish-owned Turkcell has clashed with MTN in the past when MTN won the licence to operate IranCell. Subsequently, Turkcell lost a court challenge against MTN.
Sibonginkosi Nyanga, an analyst at Momentum SP Reid Securities, said yesterday that MTN had been unable to repatriate dividends owing to the sanctions.
Nyanga said MTN would be able to allocate the money towards paying off the Nigerian fine. “This is a significant development for MTN. If the funds can be repatriated from Iran, MTN may decide to channel the money to settle the Nigerian fine. MTN has already paid $250 million towards the Nigerian fine.”
Nhleko said MTN had experienced an extremely difficult 2015, particularly in the last quarter of the year when the Nigerian Communications Commission (NCC) imposed a $5.2bn fine relating to subscriber registration requirements.
“The $5.2bn fine imposed by the NCC for the late disconnection of 5.1 million improperly registered subscribers, and its subsequent reduction at the NCC’s discretion to $3.9bn, was the most material and multi-faceted challenge the group faced in 2015.”
Settlement
Nhleko added that months of intense engagement with the NCC had led to a good faith payment of $250m to the government of Nigeria on February 24, on the basis that this would be applied towards a settlement.
MTN also agreed to retract its legal action against the NCC in support of an environment conducive to reaching an amicable settlement on the matter. Negotiations were ongoing.
Zuma’s business delegation included representatives from the oil and gas refineries. The goal of the visit was to restore South Africa’s trade figures with Iran to the pre-sanctions level of $2bn.
BUSINESS REPORT