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MTN president and CEO Rob Shuter is making his exit from the company amid a share price plunge and stiff fintech competition on the continent, but for some, he did what he was supposed to do.
MTN announced Shuter’s departure was set for March 2021 at the end of his four-year contract at the mobile telecoms giant.
His next stop is at UK-based telecoms company BT Group, where he will also serve as CEO.
Since his appointment, MTN’s share price has been a weak point, tumbling by more than 54% in the past three years.
He also took the helm at a time when the company was grappling with regulatory issues in Nigeria. In January, the government dropped its $2 billion tax claim against MTN, which stemmed from a 2018 issue.
It is not the first time it has found itself in the crosshairs of Nigerian authorities after the government fined it $5.2 billion for disconnecting more than five million MTN Nigeria subscribers.
This was later reduced to $5 billion, most of which MTN has paid.
Shuter’s background in financial services, as well as a stint at Vodacom, seemed to align with MTN’s 2017 Bright strategy, for which some of the focus was on customer experience, efficiency, commercial performance and growth through data and digital.
The strategy sought to grow the company’s data subscribers to 200 million and its digital subscriptions to 100 million by 2022, including 60 million Mobile Money subscriptions.
Mobile money subscribers are currently at 22.2 million, spread out over 15 countries, with 37.8 million more to go by its target year.
Share price not the only measure
The telecoms giant, which owns the MTN MoMo mobile money platform, has found itself up against fintech companies like M-Pesa.
Michael Treherne, a portfolio manager at Vestact Asset Management, said: “I reckon if you look back you will probably be slightly disappointed on how far the company has come, most CEOs are measured on how well the share price has done in their tenure and obviously the share price has been dismal.”
However, he added that did not mean Shuter – who brought rigour, new standards, focus and the Bright Initiative at MTN – had failed.
“MTN never had any of that. [It] was almost a fly by the seat of your pants, take one deal at a time type [of company],” Treherne said.
With regards to Shuter’s successor, he added he was betting his money on CFO Ralph Mupita who was appointed in 2017.
Treherne said the fact that Shuter did not have a permanent contract, but Mupita did, was a clue to the telecoms giant’s succession plan.
The share price was likely to begin doing well as Shuter’s strategies began to bear fruit after he left, but a lot of the success would be down to the outgoing CEO’s groundwork, he added.
Outlook for mobile money
Mobile money was a great business if they could get scale it to get buy-in from consumers but that had been difficult, said Treherne.
He added MTN had been pushing for mobile money in Nigeria for at least three years and there was pushback from the banks there.
Even in South Africa, with its good banking infrastructure and banks like Capitec catering to the lower end of the market, the demand has not been as big as MTN had hoped.
Peter Takaendsa, the head of equities at Mergence Investment managers, said it was a bit soon to try to gauge MTN’s fintech performance, but Shuter had done well in setting the strategy going forward.
“I think what was important is for him to clearly set the strategy and clearly communicate where MTN should go over time because apart from a few operators in East Africa, there is no operator which has been able to grow financial services to be a very big part of the business.”
He said Shuter had done well in terms of the direction MTN should take on new revenue streams and which assets to exit such as its towers.
Takaendsa added MTN should ensure it stayed ahead of its competitors in terms of mobile data and mobile money and should look to grow its market share.
MTN’s airtime advance offering seems to be doing well, he said and that that was another area it should be looking to maintain market share and growth in.
Outside of South Africa, voice still presents a growth opportunity for MTN as its revenues in that segment have been doing well.
However, he said nothing stops MTN from providing insurance as a standalone products.
As for where the next CEO could come from, Takaendsa added the succession plan the group had embarked on that saw it appoint people to a few senior positions such as Ralph Mupita, meant Shuter’s successor was likely to come from within.