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Guinean government seizes MTN assets

Broadband access is still unaffordable in many emerging markets

The Guinean government has seized all assets of MTN subsidiary Areeba. Under the terms of a decree signed by state president Alpha Conde and released to Reuters, the government has requisitioned personnel, equipment, infrastructure and facilities in a row over the payment of €15m in fees. The payment relates to MTN’s acquisition of local operator Areeba in 2007.

The seizure follows a warning to MTN from Guinean authorities last week that Areeba’s licence would be suspended if the dispute was not settled by April 29th. According to the decree, the government would “provisionally administer” the telco from May 2nd until the dispute is resolved. MTN spokesman Rich Mkhondo said that the telco is in negotiations with the government to “reach an amicable solution that will be in the best interests of all the stakeholders affected.”

MTN’s difficulties are the latest in a series of spats that the Guinean government has had with businesses in the country since president Alpha Conde came to power in December last year. A port deal with France’s Getma international has been cancelled, along with a Brazilian railways project; Rio Tinto has had repeated spats with the government, while Russian mining company RUSAL is also being billed for back taxes and levies.

MTN isn’t the only African telco to fall foul of government decrees; in March, Tunisia’s government took a controlling stake in Orange following a cabinet decree calling for the seizure of all assets held by former president Ben Ali. The Mabrouk Group, owned by the son-in-law of the former president had owned 51 per cent of the company.

MTN bought Areeba in 2007 as part of a $5.5bn merger with Lebanon-based mobile set-up Investcom LLC. According to Informa research, Areeba has over 1.8m subscribers, representing about 3 per cent of the firm’s West and Central African subscriber base, which accounts for 45 per cent of subscriptions.


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