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MTN raises R14bn in “fire sale”

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MTN has revealed that it has sold off assets worth R14-billion in the past year.  The sales are positioned as part of an Asset Realisation Programme (ARP) announced in March 2019. It is intended to simplify the MTN portfolio, reduce debt and risk, and improve returns.

In May last year, it announced that it had sold its stakes in investment fund Amadeus and travel platform Travelstart to HarbourVest, a global private equity firm, for R1,2-billion. In June, it announced in its interim results to June 2019, it sold a shareholder loan in ATC Ghana to American Tower Corporation for R900-million.  

It reported at the time that its tower businesses included 49% holdings in both ATC Ghana and ATC Uganda. During the first half of the year, it “saw a strong contribution from both of R58-million in June 2019”. 

Now, says MTN, it has concluded an agreement to dispose of its 49% equity holdings in the Ghana and Uganda Tower Company investments to a subsidiary of American Tower Company for $523 million, or approximately R7.3-billion. The deal is expected to close by the end of March 2020. 

MTN also confirmed today that MTN Nigeria has completed the redemption of preference shares, with MTN Group receiving US$315 million ( around R4,4 billion) in December 2019. 

“Following the completion of these transactions, MTN will have realised proceeds of approximately R14-billion within the first 12 months of this programme,” said group president and CEO Rob Shuter. “Realising proceeds from simplifying the group remains a major strategic objective and we expect further progress in this program in 2020.”

MTN’s market capitalisation, as of 2 January 2020, stood at R157,77-billion. The scale of the asset sale, representing close to 10% of market cap, suggest an urgency in addressing issues facing MTN during the first half of 2019, such as slowing growth in South Africa in the first six months of 2019, when MTN SA posted 3.3% growth, In Nigeria, the initially successful listing of e-commerce platform Jumia on the New York Stock Exchange hit a brick wall. Trumpeted as Africa’s first unicorn after it achieved an initial market cap of more than $1-billion, the share price quickly wavered when it was revealed that the company – % owned by MTN – had built up losses of more than $1-billion since 2012.

At the time of listing, MTN had stated its intention to reduce its stake in Jumia. However, it is likely that the slump in the share price, which crashed from above $40 to a low of $5, and currently trading at below $7, has put that particular windfall on hold.

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SA’s Internet goes down again

South Africa is about to experience a small repeat of the lower speeds and loss of Internet connectivity suffered in January, thanks to a new undersea cable break, writes BRYAN TURNER

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Internet service provider Afrihost has notified customers that there are major outages across all South African Internet Service Providers (ISPs), as a result of a break in the WACS undersea cable between Portugal and England 

The cause of the cable break along the cable is unclear. it marks the second major breakage event along the West African Internet sea cables this year, and comes at the worst possible time: as South Africans grow heavily dependent on their Internet connections during the COVID-19 lockdown. 

As a result of the break, the use of international websites and services, which include VPNs (virtual private networks), may result in latency – decreased speeds and response times.  

WACS runs from Yzerfontein in the Western Cape, up the West Coast of Africa, and terminates in the United Kingdom. It makes a stop in Portugal before it reaches the UK, and the breakage is reportedly somewhere between these two countries. 

The cable is owned in portions by several companies, and the portion where the breakage has occurred belongs to Tata Communications. 

The alternate routes are:  

  • SAT3, which runs from Melkbosstrand also in the Western Cape, up the West Coast and terminates in Portugal and Spain. This cable runs nearly parallel to WACS and has less Internet capacity than WACS. 
  • ACE (Africa Coast to Europe), which also runs up the West Coast.  
  • The SEACOM cable runs from South Africa, up the East Coast of Africa, terminating in both London and Dubai.  
  • The EASSy cable also runs from South Africa, up the East Coast, terminating in Sudan, from where it connects to other cables. 

The routes most ISPs in South Africa use are WACS and SAT3, due to cost reasons. 

The impact will not be as severe as in January, though. All international traffic is being redirected via alternative cable routes. This may be a viable method for connecting users to the Internet but might not be suitable for latency-sensitive applications like International video conferencing. 

Read more about the first Internet connectivity breakage which happened on the same cable, earlier this year. 

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SA cellphones to be tracked to fight coronavirus

Several countries are tracking cellphones to understand who may have been exposed to coronavirus-infected people. South Africa is about to follow suit, writes BRYAN TURNER

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From Israel to South Korea, governments and cell networks have been implementing measures to trace the cellphones of coronavirus-infected citizens, and who they’ve been around. The mechanisms countries have used have varied.  

In Iran, citizens were encouraged to download an app that claimed to diagnose COVID-19 with a series of yes or no questions. The app also tracked real-time location with a very high level of accuracy, provided by the GPS sensor. 

In Germany, all cellphones on Deutsche Telekom are being tracked through cell tower connections, providing a much coarser location, but a less invasive method of tracking. The data is being handled by the Robert Koch Institute, the German version of the US Centers for Disease Control and Prevention. 

In Taiwan, those quarantined at home are tracked via an “electronic fence”, which determines if users leave their homes.  

In South Africa, preparations have started to track cellphones based on cell tower connections. The choice of this method is understandable, as many South Africans may either feel an app is too intrusive to have installed, or may not have the data to install the app. This method also allows more cellphones, including basic feature phones, to be tracked. 

This means that users can be tracked on a fairly anonymised basis, because these locations can be accurate to about 2 square kilometers. Clearly, this method of tracking is not meant to monitor individual movements, but rather gain a sense of who’s been around which general area.  

This data could be used to find lockdown violators, if one considers that a phone connecting in Hillbrow for the first 11 days of lockdown, and then connecting in Morningside for the next 5, likely indicates a person has moved for an extended period of time. 

The distance between Hillbrow and Morningside is 17km. One would pass through several zones covered by different towers.

Communications minister Stella Ndabeni-Abrahams said that South African network providers have agreed to provide government with location data to help fight COVID-19. 

Details on how the data will be used, and what it will used to determine, are still unclear. 

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