MTN promoted finance head Ralph Mupita, who describes himself as a problem solver, to the top job on Wednesday — a move met by investors with a collective nod of approval.
Shares in MTN jumped as much as 3.5% before trimming gains to trade at 1.41% higher by the close, outperforming rival Vodacom, which was barely changed.
The appointment of Mupita was not unexpected. It was also a laudable effort at succession planning. It would have caused shareholder discomfort for a company the size of MTN to navigate the Covid-19 financial crisis without permanent CEO.
The 48 year-old Zimbabwean will take up the role from September 1, and Shuter will remain available until the end of his contract in 2021 when he leaves to join Britain's BT Group as head of the enterprise division.
Shuter has rolled the dice on mobile financial services, gaming and music streaming as the next big growth area for the comparatively underperforming mobile phone group, whose image as one of postapartheid SA’s biggest commercial successes has been tainted by clashes with regulators.
Now it falls to Mupita, an engineering graduate, to show it was a sensible gamble as it is unlikely he would want to unwind the strategy and chart a new course.
If the share price reaction is anything to go by, Mupita is clearly a good pair of hands to advance the growth blueprint, which also includes shedding loss-making e-commerce platforms and exiting unstable and war-torn markets. MTN recently announced it will over the next three years withdraw from the Middle East.
Mupita was part of the strategic thinking that mapped MTN’s way out of the ditch into the hunt for returns in the unfamiliar world of finance when he was named CFO within months of Shuter entering the CEO suite in Roodepoort in 2017.
Like Shuter, Mupita has extensive experience in finance after spending almost five years as insurer Old Mutual’s emerging-markets unit CEO, responsible for life insurance and asset management at home, elsewhere in Africa, Latin America and Asia.
It should be easy to prove that Shuter was right in his assessment that the biggest immediate opportunity for MTN, which has underperformed rivals operationally and in the stock market in recent years, lies in mobile financial services, which span payments and savings to insurance and consumer loans.
In its latest annual financial results, MTN posted a 27% jump to R10.1bn revenue for fintech services after adding 7.5-million users to its mobile money service, which now counts 35-million users, generating monthly average revenue per user equivalent to R19.
If MTN can convince just half of its customer base across its markets in Africa to use the service and maintain the average revenue per user, it could tap more than 100-million people, which could bring in between R22bn and R30bn, or as much as a fifth of its roughly R151bn top line.
On a continent where people with formal bank accounts are few and far between, it should be an easy problem to solve for Mupita. In fact, in Nigeria, where more than 100-million people, or 60% of the population, do not have bank accounts, MTN has started rolling out its mobile money service after securing a licence to offer a broader and deeper range of financial services products.
Perhaps the biggest problems facing Mupita — who was part of a team that put out fires related to MTN clashes with Nigerian authorities over a range issues that include a dispute over dividend repatriation — are the Covid-19 economic shock, a $2bn tax dispute in Nigeria and a lawsuit alleging violations of US antiterrorism laws in Afghanistan.
For a man drawn to tricky situations, it will be an exhilarating ride.
• Motsoeneng is deputy editor.
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