MTN’s newly appointed group chief enterprise officer, Mteto Nyati — until recently MD of Microsoft South Africa — has been given a big target to chase. In the next three years, he has to build the mobile operator’s enterprise (business) revenues to 20% of group total, from single digits now.
And acquisitions — of any size — will form a key component of how Nyati intends reaching that target. To provide an idea of the size of the enterprise sales MTN is hoping to bring in three years from now, 20% of the group’s revenues in its most recent financial year — 2013 — works out to more than R27bn.
Nyati tells TechCentral that MTN has already identified a number of acquisition targets and is engaged with these companies in “high-level discussions”.
He declines to say which parties the group is talking to, but emphasises that MTN won’t buy traditional IT services companies, but rather those that already play in new IT areas like cloud computing and cloud services. It won’t buy “labour-heavy” companies, but will look for solutions and platforms that can be offered over its network from its data centres.
“If we went for labour-intensive companies, we’d have to make acquisitions in every country,” says Nyati. “The key principles for us in an acquisition are: it needs to be something that is scaleable that can be taken across all our operating units, and it needs to leverage the cloud.”
Acquisitions will not be limited to South Africa. MTN operates in 22 markets across Africa and the Middle East. Its biggest and most profitable market is Nigeria, although South Africa remains the biggest for the group when it comes to enterprise revenues.
Nyati believes it is imperative that MTN grows its enterprise business to help offset the slowing consumer mobile side of the business.
“The telecoms industry has reached a point of maturity, with most telcos driving efficiencies. It’s no longer just about growth,” he says. “What the industry is doing is trying to find new sources of revenue. We want to grow the enterprise leg significantly, and the opportunity is huge. Trends like cloud, big data, social — all of those things play to the strengths of telcos, but right now the telcos are not necessarily the big beneficiaries of those trends.”
MTN sees the public sector, the corporate segment and small and medium businesses as enterprise customers. One particular area of focus will be helping South African companies expand their presence elsewhere in Africa. “We [MTN] have done it ourselves, so we know the issues and the challenges.” — (c) 2014 NewsCentral Media
