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MTN evaluates Afghan exit plans as Taliban retakes Kabul

By , Senior news journalist
Africa , 18 Aug 2021

MTN Group, which previously received backlash for alleged dealings with Taliban forces, is staying put in Afghanistan for now, after the militant group retook the capital city 20 years after being driven out of Kabul by US troops.

Africa’s biggest telco says it will continue to offer telecom services to over six million subscribers in Afghanistan, while evaluating its options to exit the volatile Middle East region.

MTN Afghanistan held 40% of the market at end-June 2021, and has 356 employees, whom the telco says are working remotely at the moment.

“MTN Group is evaluating our options to exit Afghanistan and Yemen, in line with our plans first announced in August 2020, to focus on our Pan-African strategy and exit the Middle East over the medium-term.

“Our network continues to provide services to all our 6.3 million subscribers in the country,” says the telco.

The Taliban marched into Kabul on Sunday, taking control of the country, 20 years since the militants were pushed out by the US Army.

The militant group previously targeted telcos, kidnapping engineers and destroying transmission masts.

MTN wouldn’t be drawn to comment on how the change of political landscape in that country will impact its operations going forward.

Beat-back unlikely

However, Dobek Pater, telecoms analyst at Africa Analysis, believes MTN’s operations will not be negatively impacted, as it is in the militants’ interest, especially now, to ensure infrastructure remains intact and operational.

“The departure of the larger foreign telcos would probably result in a short- to medium-term deterioration in the extent and quality of services.”

He notes the departure of telcos like MTN from Afghanistan depends on the stability of the country going forward.

“If the latent state of war or hostilities comes to an end and (relative) peace prevails, then this would encourage the telcos to remain in the country. However, if the reverse is true, and conflict flares up again, they will be inclined to leave.

“Additionally, if the regulatory environment becomes too onerous, including the Taliban government wanting a majority shareholding in foreign companies to be held by the Afghani government or local companies, then this would be cause for concern and foreign companies would consider leaving.

“Regulations may also include extreme difficult or impossibility of repatriating profits. Thirdly, if the economic situation deteriorates significantly over the short-term (including for the two reasons mentioned above), and telcos struggle to remain profitable, they would be inclined to leave.”

Source of concern

For MTN, operations like those in Afghanistan and the rest of the Middle East have been problematic in the last few years, which prompted the telco to initiate an exit strategy from the region.

The telco announced plans to exit the Middle East last year, and just last week, MTN abandoned its Syria unit after battling with authorities after the company was placed under curatorship.

CEO Ralph Mupita announced: “The group has initiated an exit of Syria, through abandoning the operation, given regulatory actions and demands that make operating in the market untenable. We reserve our rights to seek redress through international legal processes, given the actions of the Syrian authorities that have left us with no other choice than to exit.”

In Afghanistan, MTN has been dealing with long-running court challenges after it was accused of violating US anti-terrorism laws through alleged payments of protection money to militant Islamist groups.

The telco was accused of declining to use armed guards to protect its towers, opting for cheaper “security” by buying it from the Taliban.

The accusations claim the alleged payments helped finance a Taliban-led insurgency that led to the attacks on Americans in Afghanistan between 2009 and 2017.

MTN has denied the allegations and recently announced to shareholders that it had crossed the first hurdle of the lawsuit unscathed, after the court recommended the case be dismissed.

“MTN is pleased to report that on 30 July 2021, the magistrate judge to whom the case had been referred made a recommendation to the district judge presiding over the case to grant the motion to dismiss for all defendants in the case, including as submitted by MTN defendants,” said the company.

“The magistrate judge further concluded that the court did not have jurisdiction over MTN defendants. Under the US court’s procedures, the plaintiffs are permitted to file objections to the report with the district judge, and MTN defendants will have an opportunity to respond.”

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