MTN has hit back at reports that the company plans to move its group operation out of SA and into Dubai.
“The MTN Group would like to strongly refute the mischievous speculation that it intends to 'abandon' SA and delist from the JSE,” the company said in a statement released yesterday.
The statement follows the revelation that the company may have plans to move its group structure out of SA and into Dubai, leaving the South African operation as a subsidiary and possibly even up for sale.
“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,” the company explained.
MTN declined to either confirm or deny the speculation last week, when ITWeb questioned the company on its group operational plans, instead noting that it has its management services in Dubai. It also confirmed that its Technical Services Support Team had been moved there.
Analysts have indicated such a move would make sense for the group, since it would be closer to two of its highest revenue earners, Nigeria and Iran.
Both countries have outstripped SA in terms of growth, with Nigeria already showing income dominance for MTN in 2008. Analysts have also indicated that having a more northern head office could provide it easier access to other new markets either in the Middle East or even in Southern Europe.
In an earlier interview, Chris Gilmour, an analyst at Absa Investments, also indicated that MTN's listing on the JSE is only really hurting the business. “Every time there is a blip on the South African network, MTN's share price takes a nosedive. It makes no sense for a company across so many countries to list here in SA,” he noted.
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