MTN Names Vodafone Executive as CEO in Wake of Nigeria Fineby
New CEO Rob Shuter is South African with European experience
Analyst: ‘Lot of low-hanging fruit that can quickly be fixed’
MTN Group Ltd. named Vodafone Group Plc’s Rob Shuter as chief executive officer, turning to a seasoned executive to lead Africa’s biggest mobile-phone company following the settlement of a record fine in Nigeria.
Shuter, a South African who leads Vodafone’s European cluster as CEO, will start by July 1, 2017, MTN said in a statement Monday. He will replace Phuthuma Nhleko, who returned to lead Johannesburg-based MTN last year and oversee the 330 billion naira ($1.28 billion) settlement in Nigeria. Nhleko, 56, will revert to his previous role as non-executive chairman once Shuter arrives.
MTN is moving to shore up its management team following a months-long battle with Nigerian authorities over the company’s failure, amid an insurgency in the country, to reach a deadline to disconnect unregistered users. The company is adding other executives, including a manager from Vodafone’s South African Vodacom Group Ltd. unit, and named several members to its board.
“In terms of execution and experience Rob is definitely the right man for the job,” Peter Takaendesa, a senior analyst at Mergence Investment Managers, said by phone. “There’s a lot of low-hanging fruit that can quickly be fixed at MTN.”
MTN’s stock price had weakened by a third amid the negotiation and uncertainty about their outcome. More recently, it has gained on the settlement in Nigeria, along with a devaluation of the Nigerian naira, which will have the effect of lowering the fine’s cost. MTN declined 2 percent to 141.77 rand at 2:25 p.m. in Johannesburg. The stock is up 6.6 percent year-to-date.
Shuter, 48, has held senior management roles at Vodacom, Standard Bank Group Ltd. and Nedbank Group Ltd. prior to joining Vodafone. He will start as soon as practically possible in 2017, after completing his contractual obligations, MTN said.
MTN said it’s confident Shuter will bring “experience and new insights to the CEO role having had many years in the telecoms sector, both in Africa and Europe, as well as in banking where his expertise will help as MTN continues to develop its new business strategy.”
Investors have always been comfortable working with Shuter, and his experience from Europe with Vodafone has added a new dimension to his management skills, Ian Brink, an analyst at Arqaam Capital, said by phone.
“The European telecommunications market is a more mature market and in many instances the African market is also starting to move in that direction,” Brink said.
MTN reached the deal to pay the fine, one-third of an original penalty, after eight months of start-and-stop negotiations with Nigerian officials. The damages were levied for missing a deadline to disconnect 5.1 million customers unregistered in the country. Former CEO Sifiso Dabengwa resigned in November to take responsibility for the dispute.
In its wake MTN said it’s working to improve the risk and governance profile of its board. The company appointed three new directors: Paul Hanratty, a veteran of insurance and asset management group Old Mutual Plc; Stan Miller, a board member of Russian carrier Mobile TeleSystems PJSC and formerly an executive of Dutch operator Royal KPN NV; and Nkunku Sowazi, who leads investment company KTH, and sits on the board of Gridrod Ltd.
MTN named Vodacom Group Ltd.’s Godfrey Motsa to oversee operations in Uganda, Botswana, Rwanda, Swaziland and Zambia. The carrier also said it had appointed an executive with experience from banking to help produce a revised strategy and increase the focus on acquiring new revenue streams. The company didn’t name the executive, who will start Oct. 1.