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TRYING HARD: Nomsa Dalamba and Buhle Nginda in one of MTN's container outlets in Soweto. But the company is battling to overtake Vodacom. PHOTO: KATHERINE MUICK-MERE

 I think the Iran issue is challenging one for MTN. It will not make business sense for them to leave. They will have to devise ways of surviving without government support 

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The operator announced that its subscriber numbers had gone up by 3.7% with MTN Iran being the third largest contributor to the company's coffers, after Nigeria and South Africa.

Analysts said that the international operator's options on Iran were growing thin, and that pulling out would have crippling effects on its bottom line.

MTN group recorded more than 170million subscribers at March 31 2012 - a 3.7% increase for the quarter from more than 164million subscribers recorded on December 31 2011.

The group delivered a satisfactory performance notwithstanding continued high levels of competition in key markets, it said on Friday.

MTN said the Iran operations continued to deliver a solid performance, growing its subscriber base by 6.2% and increasing its share of the market for the quarter.

MTN Iran is the third-largest profitable operation of the 22 countries in which the company operates. The telecom group has a 49% stake in Iran's second-largest mobile phone operator and derives 30% of its subscriber base from the country.

Telecoms analyst Chris Ngwenyama, at research firm Africa Analysis, said the operator had few options in Iran.

"I don't think they are in a position to exit Iran now. They have cash they can't repatriate right now. It's a lucrative operation and, looking at subscriber numbers, they would like to stay in Iran," Ngwenyama said.

Ngwenyama explained that even if MTN wanted to sell, they had only one option and that was to sell to the Iranian government, which would be a long process.

Frost & Sullivan analyst Mervyn Miemoukanda said the Iran issue was a "tricky" one for MTN.

"I think the Iran issue is challenging one for MTN. It will not make business sense for them to leave. They will have to devise ways of surviving without government support," he said.

Updating shareholders on the group's subscriber numbers, MTN said SA contributed 13.3% to group subscribers and delivered a sound performance in a mature market.

It increased its subscriber base 3.2% for the quarter. The post-paid segment performed well, increasing its subscriber base by 4.4%.

The prepaid segment increased its subscriber base by 2.9%. MTN said this was attributable to promotions, including the continuing success of MTN Zone through improved informal distribution channels.