Sudan - Telecoms, Mobile and Broadband - Statistics and Analyses

Sudan - Telecoms, Mobile and Broadband - Statistics and Analyses

Zain Group prepares to exit Sudan, citing difficult economic conditions

Sudan’s economy has been volatile since South Sudan separated from it in 2011. In a bid to compensate for lost state revenues, the sales and services tax for telcos was raised from 20% to 30%, while the tax on profits was raised from 15% to 30%.

GDP growth was stagnant from 2012, and became negative in 2018, 2019, and 2020. However, the IMF expected that the economy had recovered in 2021, though by only 0.4% in the year.

The effects of hyperinflation and high taxes have been immediate on the telcos. Zain Group had gamely endeavoured to hold on to its interests in the country, though with difficulty. The company invested $30 million to secure additional spectrum in 2020, enabling it to improve the quality and reach of services. The licences for this spectrum run to January 2029.

However, the hyperinflationary economy resulted in a 28.8% fall in reported revenue for the first nine months of 2021, year-on-year. Accepting that its prospects in Sudan are poor, the Group in December 2021 began to evaluate a $1.3 billion offer from Invictus Holding for its units Zain Sudan and the associated Kuwait Sudanese Holdings. Should Zain Group exit Sudan, it would be a move undertaken by companies such as Millicom International and MTN Group, which have similarly withdrawn from markets which have proved to be too hard, and with little return for investment and effort.