MTN Group is going to invest more than $295 million in Iranian Net, a fixed line broadband network in which it is to buy an initial 49 per cent stake, according to a Reuters report.
The deal extends MTN's interests in the Iranian telecoms market that has 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 pe rcent stake in wireless network operator Irancell. This is MTN's second agreement in Iran this year; earlier it has also invested in Iran Internet Group, which runs a car hailing app called Snapp.ir.
“The cash-repatriation problems have eased significantly [after] the easing of sanctions on Iran,” said Peter Takaendesa, portfolio manager at Mergence Investment Managers, according to Business Day. “There is always a risk of geopolitical events affecting Iran again, so MTN needs to balance that risk with the significant growth [in] the Iranian market.” MTN investor relations head Nik Kershaw has said that Iran is MTN's highest market around 3G or smartphone penetration.
MTN said it will pay 540 million rand ($40 million) to buy a 49 per cent stake in Iranian Net and will invest an additional 3.4 billion rand ($250 million) 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 said in a statement.