Rob Shuter’s announcement that he will not seek to extend his contract as MTN Group CEO a year before it ends will allow the board enough time to pick a suitable candidate.
News of his departure overshadowed the mobile operator’s full-year results on Wednesday.
Shuter, a former banker who joined MTN in 2017, said the job is taking a toll on him. “Four years at MTN is equal to eight years anywhere else.”
“It has been the greatest privilege of my working career, but it has been enormously challenging. And it comes at a great sacrifice as my brother here knows (referring to chief financial officer Ralph Mupita).”
World Wide Worx MD Arthur Goldstuck said Shuter has done a good job of turning the group around. When he took charge it was clear that, in its cross-border operations, MTN “was playing hard and fast with the rules”.
At the time, the group was initially fined US$1.7-billion for not registering Sim cards in Nigeria. It was then ordered to pay an additional $2-billion in taxes in 2018. All of these matters have now been settled.
Shuter says relations with the Nigerian authorities have improved. He and MTN chairman Mcebisi Jonas flew to the West African country in January to meet with key decision makers, including President Muhammadu Buhari.
Key market
Despite the regulatory difficulties in Nigeria, it remains a key market for MTN as it is seen as a big growth driver. This is evident in its results for the year to end-December, with service revenue in Nigeria rising 12.6% to R46.6-billion and earnings before interest, tax, depreciation and amortisation (Ebitda) up 15.7% to R20.9-billion.
Nigeria is not the only operation that did well. Its Seagha region — comprising Ghana, Uganda, Rwanda, Zambia, South Sudan, Botswana and Swaziland — saw service revenue jump 21.7% to R 26.7-billion.
There’s a similar story with Mena, which houses its Syrian and Sudanese operations: it saw service revenue rise 18.8% to R21.65-billion.
For its part, its West African operation Weca only saw service revenue up 2.9% to R8.9-billion.
The weakest performance came from South Africa, where service revenue increased a nominal 0.4% to R36.4-billion. The difficulty in the local market can be seen in voice revenue falling 0.6% to R15.7-billion. This was somewhat offset by data rising 5.2% to R12.6-billion.
Nursing the steady fall-off in voice revenue while preparing the group to be more focused on providing a data service was one of the trickiest things Shuter had to manage, said Goldstuck.
Although voice is clearly on the decline locally, Shuter still sees a future for it in MTN’s cross-border operations. He pointed to the room to grow in some markets, as well as the continent’s youthful population, as opportunities for its voice service.
This potential can be seen in statistics from the International Telecommunication Union, which show that while South Africa has 159.9 mobile-cellular telephone subscriptions per 100 inhabitants, Zambia has 89.2 and Benin 82.4.
Aside from South Africa, the group’s operations all reported an upswing. Conspicuous by their absence however were references to MTN Irancell. Other than saying it was an “associate” company, there was little mention of it.
US sanctions
According to the results booklet: “MTN Irancell delivered a solid result notwithstanding the challenges facing the business with the re-introduction of US sanctions, the depreciation of the currency and the high rate of inflation. Service revenue grew by 20.1% (to R7.9-billion), with voice up by 24.2% (to R2.8-billion) and data revenue up by 23.2% (to R4-billion).”
Though MTN Irancell might be stuck in limbo, there is no such rudderlessness with Shuter. He said he will be working nonstop until he leaves in a year’s time.
“I have an on switch and an off switch. I don’t have a medium switch. So I will be fully engaged for the next 12 months.”
- This article was originally published on Moneyweb and is used here with permission