MTN Group, one of Africa’s largest telecom companies, is in talks with South African and US officials about moving money out of its Iran business, amid tightening sanctions which are making it hard to repatriate funds, Angolan news agency said on Thursday.
Chief Executive of the Johannesburg-based MTN, which reported a 14% increase in H1 profit, said a likely devaluation of the Iranian rial could have a “severe impact” on second-half results. Reports coming from Tehran suggest the Iranian central bank is considering a devaluation to stem open market fall against the US dollar.
The South African mobile operator owns 49% of MTN Irancell, which contributes nearly 10% of its total revenue, but is facing increasing difficulties to operate in the sanctions-hit Islamic Republic.
MTN is being sued by rival Turkcell for $4.2 billion in a US court, saying it used bribery and lobbied South Africa to support Tehran’s military in return for a 2005 cellular licence in Iran that was originally awarded to the Turkish firm.
MTN denies the charges and calls Turkcell’s demands as “extortion”.
Chief Executive Sifiso Dabengwa told reporters after MTN’s first-half results on Wednesday that it had been unable to take cash out of the business for at least six months.
“There is general acceptance that we should not be punished. US sanctions should not have unintended consequences for non-US companies,” Dabengwa said.
Washington is putting increased pressure on Iran over its nuclear programme and is cracking down on non-US companies that have business deals with Tehran.