MTN Says It's Committed to Iran Business

WSJ.com—MTN Group Ltd. will leave Iran only if South Africa applies sanctions on the country, Chief Executive Sifiso Dabengwa said Wednesday, sticking to the company's position that it has done nothing wrong in South Africa and that business there is good, with growing subscribers.

The South African telecom company is facing international pressure to pull out or scale down operations in Iran, which has been accused by the U.S. and many European Union countries of seeking to develop nuclear weapons—a charge Iran has denied.

"We are guided by South African government policies internationally," Mr. Dabengwa said, noting that the country hasn't imposed sanctions on Iran.

MTN has a 49% stake in Iran's second-largest mobile-phone operator and derives 21% of its subscriber base from Iran, according to recent figures from MTN.

If MTN were forced to exit, Mr. Dabengwa said, the company would seek to sell the business.

"There will definitely be takers if one looks" to such countries as Brazil, Russia, India and China "that aren't necessarily easily swayed by the U.S. position on issues," he said.

The telecom company and its Iran operation are the latest target of the U.S. lobbying group United Against Nuclear Iran, which has sent letters to the company and U.S. congressmen in a bid to get MTN to leave the Middle Eastern country.

The group has also accused MTN of helping the Iranian government to track phone users. Last week, MTN denied those claims. Mr. Dabengwa said Wednesday that interception equipment is installed in all countries where the company operates. "What the government decides to do with that equipment is not in our hands," he said. "We cannot say who they listen to and when."

Mr. Dabengwa said the U.S. government isn't putting direct pressure on MTN but is doing so on some of its partners, especially banks with which it does business. MTN, which until the middle of last year used banks in Dubai to get money in and out of Iran, says it is looking for alternative ways to get cash out of the country.

Further sanctions by U.S. and European governments could hinder MTN's ability to get equipment into Iran, Mr. Dabengwa added.

Last month, MTN appointed an external committee to investigate claims by Turkish operator Turkcell AS that it had engaged in bribery to secure its license in Iran. MTN said it won't comment further until the investigation is concluded, which it expects to take three to five months.

MTN also reported Wednesday that its subscriber base in Iran rose 17% in its 2011 financial year to total 34.7 million. It said revenue from the Iranian business—a joint venture with the government of Iran—rose 27%.

Write to Devon Maylie at [email protected]