MTN looks inside for a new boss

The appointment of MTN CFO Ralph Mupita as the group CEO – beating at least five other internal and external candidates that were in the running for the top job – was largely expected.

Market watchers expected the MTN board to look internally to replace outgoing group CEO, Rob Shuter, because Africa’s largest mobile operator has built a depth of internal talent over the past few years.

Internal individuals rumoured to replace Shuter included Mupita (group CFO) Jens Schulte-Bockum (group chief operating officer), Yolanda Cuba (chief digital and fintech officer), Godfrey Motsa (MTN SA CEO) and Ferdi Moolman (MTN Nigeria CEO). But in corporate SA, the historical practice has mostly been company boards promoting CFOs to the CEO position, possibly making Mupita the frontrunner. MTN announced on Wednesday 19 August 2020 that Mupita has been promoted to the group CEO position with effect from 1 September 2020.

Shuter will leave MTN in March 2021 at the end of his four-year contract and take up a new job to head the enterprise division of London-headquartered telecommunications company, BT Group (formerly British Telecom). He will facilitate an orderly handover to Mupita over the next seven months.

Owen Nkomo, CEO at Inkunzi Investments, has praised Mupita’s appointment not only for his professional track record, but also the impact it has on racial transformation in SA’s telecommunications sector. Mupita becomes the third black CEO to head a JSE-listed telecommunications company, joining Telkom’s Sipho Maseko and Vodacom’s Shameel Joosub. “Mupita’s appointment shows that it is not impossible to find capable black leaders in SA,” said Nkomo.

Mupita’s resumé

Mupita, a qualified engineer turned finance chief, has been MTN’s group CFO since April 2017, and before that, he was the CEO of Old Mutual Emerging Markets for five years. At Old Mutual, a life insurer, Mupita headed a business that provided financial services to individuals and companies in 19 countries across Africa, Latin America and Asia.

It is Mupita’s experience of managing businesses in emerging markets that makes him a good choice for the MTN group CEO job, said Peter Takaendesa, a senior portfolio manager at Mergence Investment Managers.

“When Phuthuma Nhleko (former MTN CEO and board chair) hired Mupita around the same time as Shuter, it was indicative at the time that Mupita would be part of MTN’s succession plan,” said Takaendesa.

“The plan was about getting a switched-on guy, who has been exposed to emerging markets and who understands digital technology and financial services because MTN is slowly moving towards offering insurance products and mobile money transfer products. But the key was getting someone who understands geography and territory.”

After all, like Old Mutual, MTN has gone from being a small South African company founded in 1994 to the largest mobile operator in Africa and eighth in the world, with operations in the rest of Africa and the Middle East.

Making a mark on Africa

Takaendesa said Mupita has an opportunity to make his mark as the new CEO by successfully executing MTN’s new strategy of exiting the Middle East in the next three to five years to focus on its home continent of Africa.

https://www.dailymaverick.co.za/article/2020-08-06-rob-shuters-swansong-removing-mtn-from-the-firing-line-in-the-middle-east/

MTN will sell out of its interests in Syria, Yemen, Afghanistan and Iran because they collectively contribute a small portion to the group’s overall profits. The exit from the Middle East reverses the legacy of Phuthuma Nhleko (former CEO) of having MTN expand into new markets.

“The new MTN strategy is clear. It is not about expanding into other geographies, it is about cutting back on the group’s geographic exposure to focus on Africa. And MTN was looking at someone good like Mupita who will have to execute the strategy… However, his job will be cut out over the next 12 to 18 months,” said Takaendesa.

Inkunzi Investments’ Nkomo said with support from the board, Mupita will be able to execute MTN’s new strategy.

“Moving into the rest of Africa will involve a lot of transactions. But Mupita knows how to do deals. This should make him comfortable to discuss things like exit prices and asset valuations in the Middle East. As the current CFO, Mupita also understands how to manage the finances of the company, which is a bonus.” BM/DM