New MTN boss bets big

Johannesburg - The new boss of MTN, Rob Shuter, has ambitious plans for the group. These include substantially increasing the company’s total customer numbers as well as subscribers to its data and digital products.

The former Vodafone European CEO who joined MTN in March said this week at his first major public appearance as MTN group CEO that he saw big growth opportunities in the 22 countries in Africa and the Middle East, where the company is present, given the projected population growth by 2020.

From 2016 to 2020 Shuter is expecting the population to grow by 7% to 700 million in the 22 countries.

However, he is projecting MTN’s customer base will grow by 29% during the same period from 232 million to 300 million.

Shuter sees even bigger potential in the data and digital sections of MTN’s business.

He said that from 2016 to 2020, MTN was projecting the subscriber base for data and digital products in the 22 countries would grow by 67% to 500 million and 250 million, respectively.

Shuter is also forecasting massive growth of 178% in MTN’s company-wide data subscribers from 72 million to 200 million by 2020 and an expansion of 456% in the group’s digital subscribers, which are currently comprised mainly of the company’s mobile money customers, from 18 million to 100 million.

Shuter said in future, the definition of digital subscribers was likely to expand beyond mobile financial services including regular purchasing of music and video streaming.

In the first half of this year, MTN generated a 10% hike in data revenue to almost R14 billion while digital revenue declined by 9% to R6.5 billion.

By 2020, the group is forecasting total revenue potential across all 22 countries of R815 billion made up of R575 billion of consumer revenue – including digital, data and voice – R210 billion in enterprise-related revenue and R30 billion of wholesale revenue.

In comparison, last year MTN generated revenue of R147 billion.

Turkcell is taking MTN to court seeking to claim $4.2 billion (R56 billion) for alleged bribery and corruption related to the securing of a licence in Iran.

Shuter said the Turkcell action was “completely spurious”.

“We will not be bullied – we will defend ourselves very vigorously.”

Shuter said that MTN had agreed to settle a fine of $8.5 million with the Rwandan government.

The fine was imposed on MTN Rwanda after it failed to comply with a regulatory directive precluding it from including its operation in an IT hub it runs in Uganda.

“It is agreed that we will pay the $8.5 million. We will spread it over the next few months. Then part of the issue is closed now.

“The Rwandan regulator felt very strongly that what had been done hadn’t addressed his concerns. So I think we made mistakes.”

The Rwandan fine follows a fine of about $1 billion that MTN paid the Nigerian Communications Commission after it failed to disconnect more than 5 million unregistered SIM cards.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot