MTN Says New CEO Shuter to Join Early as Data Traffic Soarsby and
Vodafone’s Rob Shuter to start in March; previously by July
MTN raises full-year target for subscriber growth; shares jump
MTN Group Ltd. said Rob Shuter will start as chief executive officer more than three months early as the South African wireless carrier reported data traffic that more than doubled and raised its full-year forecast for subscriber growth.
Shuter, who was hired from Vodafone Group Plc in June, will join Johannesburg-based MTN on March 17, the company said in a statement on Monday. The carrier, Africa’s biggest by sales, had previously said he would start by July 1. Phuthuma Nhleko, who returned to lead the wireless company last year, plans to appoint a new chief financial officer by the end of the year and return to his role as non-executive chairman when Shuter starts.
“During the quarter the group embarked on a material transformation project, focusing initially on its key operations of Nigeria and South Africa,” Nhleko said in the statement. “A dedicated transformation office was established” and there are “hard targets set for the next 12, 18 and 24 months.”
Shuter’s official starting date comes as the company and its bankers face another investigation in Nigeria, where a lawmaker has alleged that its local unit illegally repatriated $14 billion, a charge MTN denies. Nigeria’s central bank has instructed MTN’s lenders to suspend any withdrawal of dividends from the country while the probe takes place. MTN agreed to pay a 330 billion naira ($1 billion) regulatory fine in Africa’s most populous country in July.
The shares jumped 4.9 percent to 112.26 rand as of 9:57 a.m. in Johannesburg, the biggest gain in four months. The stock rebounded from six-year lows reached after the latest Nigerian allegations were announced.
MTN’s data traffic soared 142 percent in the nine months through September while voice volumes rose 1.8 percent. Group subscribers increased 0.9 percent quarter-on-quarter to about 235 million, including a 2.5 percent increase in Nigeria, its largest market. The company raised its full-year target for subscriber growth to 9 million from 8.1 million.
“The news of the new CEO coming sooner is encouraging,” Peter Takaendesa, a senior analyst at Mergence Investment, said by phone from Cape Town. “It also looks like a real turnaround strategy has been implemented by Phuthuma with capital expenditure being accelerated.”
MTN’s spending increased 11 percent over the nine-month period to 21.2 billion rand ($1.5 billion), with more than 4,600 3G and 4G sites added.
The company “continues to refute the allegations that MTN Nigeria had improperly repatriated funds from Nigeria,” the carrier said. “MTN Nigeria will strongly defend any action that would be prejudicial to its interest.”
MTN has begun repatriating funds from its Iranian business and expects to conclude the process over the next six months, it said.