Shares in South Africa’s most valuable mobile operator, MTN continued to lose ground in trade on the JSE on Monday (8 October) amid continuing economic woes in Iran, which have seen the country’s currency, the rial, lose significant vale in recent days.
By 13:00, shares in MTN slumped 3.76% to R151.90 on the local bourse, as ongoing economic sanctions by the west have led to a shortage of foreign currency, which has prevented the central bank from supporting the rial in the open market.
A local dealer at PSG Konsult notes that Iran is MTN Group’s third biggest market by revenue, and second largest in terms of subscribers. He said that the group is unable to repatriate profit from Irancell (49% owned by MTN), due to sanctions led by the US.
“There are big problems for MTN in that market right now,” he said.
In its most recent results presentation for the six months ending June 2012, MTN Group reported that MTN Irancell increased its subscriber base by 10.4%, to 38.3 million. MTN Irancell increased its market share to 47%.
MTN Group has a total subscriber base of 175.997 million, with Nigeria at 43.184 million subscribers, and South Africa at 23.5 million.
Iran accounts for approximately R6.5 billion of R66.43 billion in total revenue accumulated by MTN Group in its most recent interims report, with Nigeria at R19.26 billion, and South Africa at R19.86 billion.
Having reached a peak of R163.47 at the start of the month (2 October), shares in MTN Group have declined in tandem with a drop in the Iranian currency, closing at R154.58 on Wednesday (3 October) and hitting a low of R153.82 on Thursday (44 October).
Protests in Iran began on Wednesday last week (3 October 2012) after the rial hit an all-time low against the dollar and shipped around 40% of its value.