While MTN’s new boss Ralph Mupita has sold its stake in Jumia – a project launched by his predecessor, Rob Shuter – he is also beginning to impose his own philosophy on the South African mobile phone giant.
“If technology remains reserved for a small segment of society, it contributes to increasing inequalities.” Ralph Mupita spoke at the GSMA Thrive Africa 2020 virtual event, which brought together the best of the best of the African Internet scene at the end of September. He was concerned about the social impact of the group’s activities, which he has been overseeing for the past two months.
Discreet since taking up his position in mid-August, the new boss of the operator with 261 million customers and 17 African subsidiaries, is officially presented as the man of continuity. Mupita is, after all, in line with the group’s rationalisation and digitalisation strategy launched four years ago by his predecessor, the Anglo-South African Rob Shuter.
This is evidenced by the fact that when publishing its results for the third quarter of 2020, MTN announced the withdrawal of its 18.9% stake in the Jumia e-commerce platform. The transaction enables it to recover a sum of $140m, far less than it had hoped for in the early hours of the stock’s listing in New York.
Recovering stock market value
“We are proud to have been a partner in the evolution of one of the pioneering companies of Africa’s online markets and we will continue our relationship with Jumia through our permanent operational partnerships in select markets,” the operator said in a release.
Behind the scenes, the civil engineer – who did his undergraduate studies at the prestigious University of Cape Town (UCT) later switched to finance completing an MBA from there as well – is also beginning to impose his philosophy. A Zimbabwean expatriate who arrived in the Rainbow Nation at the age of 18, he defines himself as a Pan-African, sensitive to the development of his continent. October however, was marked by several business meetings far removed from any social consideration. “We have refined a very financially focused strategy, mainly concentrated on improving our share price on the stock market,” says an internal source.
In other words, Mupita wishes to succeed where Shuter failed. Still below the level recorded when Shuter arrived in 2017, the operator’s share price is struggling to return to its pre-crisis value. After a timid peak at R69 (€3.57) on the eve of the passing of the torch, the share has fallen and is trading at around R54 in Johannesburg.
A good communicator
A father and married to a former manager at Old Mutual, the new boss uses the networks of his mentor Freedom Phuthuma Nhleko, former CEO of MTN, at his disposal. It was the latter who convinced him in 2017 to leave a CEO position to come and manage the operator’s finances. Those who know the company well agree that Nhleko and his board had the intention to make Mupita – identified as a black executive with high potential – the head of MTN. Meanwhile, Shuter – a white executive – had been urgently recruited to deal with the crises that had been undermining the company since the mid-2010’s.
Presented on his appointment as an expert in financial services and M&A, this F1 enthusiast takes the helm of a stronger and more flexible operator. MTN reported good results for the first half of 2020. Its gross operating surplus (Ebitda) was up 11% to R42bn, and its net profit is expected to be around R13bn this year.
After three and a half years at the head of the operator’s finances, Old Mutual’s former manager for emerging markets feels able to tame his investors. “He is a good communicator who appreciates this kind of exercise. In his role as CFO, he fully relied on his team for the operational side, which gave him time to cultivate good relationships with the markets,” says an MTN executive.
Challenges in Ghana and Afghanistan
Two months after a rather eagerly awaited promotion, no one knows whether the new master of the house has planned an overhaul of his management committee. Although he has formed an effective duo with Shuter, whom he met in the corridors of Nedbank when he himself was at Old Mutual – the parent company – the two were not so close.
The CEO will face many challenging issues, starting with the problems of their subsidiary in Ghana. According to the National Communications Authority, MTN controls about 68% of the country’s mobile business, so its activities must be restricted to ensure fairness for competitors AirtelTigo, Vodafone and Glo.
Initially cautious as to what response to adopt, MTN, which had opted for an offensive at the end of June by taking the matter to court, has since retracted its decision, noting the regulator’s good faith in negotiations still underway.
The other extremely sensitive issue concerns the complaint filed in the US against MTN for financing terrorism in Afghanistan. While MTN denies any criminal financial connection, this case could jeopardise the sale of its subsidiaries in Syria, Afghanistan and Yemen.
Seizing new sources of revenue
Mupita has unquestionable experience in the financial side of his new position and admits to cultivating a fondness for complexity. Alongside Shuter, he had the operator undergo a drastic slimming programme to reduce his debt (the debt/total capital ratio has been halved).
He was a valuable advisor in the closing of litigation in Nigeria, capable of analysing the risks and financial effects of the decisions. From here on out, he will also have to prove his negotiating skills, especially with his political interlocutors in South Africa and elsewhere. He will also have to demonstrate his ability to acquire new sources of revenue and profitability in a telecoms and technology sector that is changing rapidly, and often brutally.
Rob Shuter’s new life
Officially CEO of MTN until March 2021, “Iron Man” remains at the disposal of his successor to assist him in the management of day-to-day business operations. Nevertheless, the Anglo-South African is preparing his return to Europe, more precisely to London. There he will be joining not only the executive committee, but also the BT Group’s subsidiary dedicated to private enterprises and the public sector.
Shuter is already familiar with the European telecoms environment, having spent eight years with Vodafone, where he held various senior positions between Johannesburg and Amsterdam from 2009 to 2015.