MTN relies on safe pair of hands with CEO choice
By picking a
respected company insider as its next chief executive, MTN Group is
betting on the steady pair of hands that helped steer the mobile
operator’s rapid growth across Africa. Africa’s largest mobile phone
company on Monday named 53-year-old Chief Operating Officer Sifiso
Dabengwa to replace veteran leader Phuthuma Nhleko as CEO when he steps
down in March. The appointment of the quiet, media-shy electrical
engineer is unlikely to mark a major change of strategy at MTN,
business associates and industry analysts said.
Dabengwa is expected to focus on retaining market share and bolstering operations after years of strong growth.
“This guy is an
insider. He is even more of an insider than Nhleko — remember Nhleko
came from outside. It’s a safe pair of hands,” said Strive Masiyiwa,
the founder of rival mobile phone operator Econet Wireless, who knows
him professionally.
Dabengwa, who has
run MTN’s operations in Nigeria and South Africa, is likely to focus on
consolidating the business and improving efficiency said Masiyiwa.
“He is not going to
be expansionist. Those days are done.” Dabengwa, who holds an MBA,
joined MTN in 1999 from state power firm Eskom . That was two years
before Nhleko, a former banker,
joined the
business. wHe will need to fend off competition from Bharti Airtel,
which is waging a price war in sub-Saharan Africa and plans to spend at
least $1.1 billion on network upgrades in the next three years.
Dabengwa also takes over just as the company faces fewer opportunities
for large-scale expansion.
Broken deals
MTN, which has
failed to complete four major deals since 2008, has said it is
concentrating on paying more to shareholders, in line with a strategy
that no longer emphasises growth by acquisition.
Its latest
acquisition attempt, a bid to buy assets from Egypt’s Orascom Telecom,
fell through in June, when Algeria’s government blocked the sale of
Orascom’s unit there.
“He is quite a firm leader and is a good choice for this job,” said an MTN executive who did not want to be named.
The executive added Dabengwa is steeped in MTN culture and should be able to navigate the challenges facing it.
He will need to
seek new revenue streams, such as mobile data — as further growth
opportunities in voice services are limited, analysts said — and focus
on cost cutting.
“He’s got a very
strong operational background, which is very important as it is
becoming very competitive,” said Frost & Sullivan analyst Spiwe
Chireka.
She said MTN must
step up expansion into the enterprise business focusing on corporate
customers. This could result in a lucrative revenue stream and a tie-up
with a global carrier.
The $35 billion
company, which operates networks across Africa and the Middle East, had
134.4 million users at the end of September. However, much of its
business is concentrated in a few markets, such as Nigeria, South
Africa and Iran.
Respect
Although well known
for years as MTN’s second-in-command, Dabengwa has tried to avoid media
publicity. He generally does not grant one-on-one interviews, limiting
public comments to annual general meetings or earnings announcements.
“I have a huge
respect for him. Very efficient, very focused and totally committed to
the company,” said Nozipho January-Bardill, MTN’s former spokeswoman.
MTN, the country’s
only mobile operator majority owned by South Africans, was set up with
government help in 1994 as the first black-owned group after the end of
apartheid.
“He is not just an
experienced senior black executive. He is a world-class executive. He
now carries the legacy of ensuring the world knows we can build
world-class organisations as black people,” said Econet’s Masiyiwa.
“I know there are people who wanted an outsider and there is no need for that. Success is built on success.”
