A vendor holds cellphones and airtime cards at a stall operated by MTN in Kigali, Rwanda. The industry is growing in leaps and bounds across the continent. File picture: BLOOMBERG
A vendor holds cellphones and airtime cards at a stall operated by MTN. Picture: BLOOMBERG

JOHANNESBURG/ISTANBUL — MTN increased 2.3% to R120.50 on Monday on news that sanctions against Iran have been lifted, a move that would free up more than $1bn in frozen accumulated dividends.

While good news for the South African cellphone company, the share prices of oil producers across the world fell on the prospects of Iran flooding an already oversupplied market.

Sasol fell 3.78% to R363, while its Brazilian counterpart Petrobras fell to a 13-year low and Nigerian equities fell to a three-and-a-half year low.

MTN, which owns 49% of unlisted Irancell, the country’s second-biggest cellphone operator by subscribers, has been restricted from repatriating money from the unit due to the sanctions.

MTN said in August last year it hoped to repatriate about $1.1bn in accumulated dividends frozen by international sanctions once Iran’s nuclear deal with world powers was finalised.

MTN spokesman Chris Maroleng would not comment.

While initially good news for MTN, the reopening of Iran to international trade may see additional competition arriving.

Turkcell is looking for acquisition opportunities to expand regionally and Iran could be a target market as sanctions against Tehran are lifted, Kaan Terzioglu, the CE of Turkey’s largest cellphone operator, said on Monday. "Iran is a huge market and in our focus. We are closely watching the Iranian market and in touch with all of its fixed line and mobile operators."

Turkcell has had a longstanding interest in Iran. In 2004, it led a consortium that won a mobile licence in Iran that was later given to a rival group headed by MTN Group. It later tried to sue MTN in a US court, but eventually dropped that suit.

Like many mobile operators, Turkcell is looking to reposition itself as a telecom services firm by increasing revenues from data, television and music services. Through acquisitions, it is hoping to source as much as 40% of its revenue from overseas, from about 9% now.

Although looking to expand its regional reach, it has not ruled out selling its nearly 42% stake in cellphone company Fintur, Mr Terzioglu said.

Fintur has operations in Kazakhstan, Azerbaijan, Georgia and Moldova and is majority-owned by Sweden’s TeliaSonera, which is looking to sell its own stake in the Eurasian firm.

Turkcell said in November it would make a nonbinding indicative offer for the TeliaSonera stake. But it could instead consider selling out if the right offer came along, Mr Terzioglu said. "If we are convinced that the price is high enough, we may consider selling our stake in Fintur," he said.

Mr Terzioglu said the firm would proceed with plans to pay a dividend again this year after its feuding shareholders called a rare truce last year, allowing the company to pay out a dividend for the first time since 2010.

Turkcell has a policy of giving away 50% of its annual distributable profit as dividend, although that has been hampered by a dispute between major shareholders TeliaSonera, Russian billionaire Mikhail Fridman and Mehmet Emin Karamehmet, one of Turkey’s richest men.

Turkcell’s net profit fell 16.5% to 631-million lira ($208m) in the third quarter of last year, mostly due to rising costs and devaluations in Ukraine and Belarus.

The firm has about 34-million customers in Turkey and has the second-biggest market share with 36% in the industry, after Turk Telekom.

Reuters