That South Africa’s MTN Group has appointed Rob Shuter as Chief Executive is not distance from what may be described as strategy from its recorded earnings loss in year 2016 after announcing a R2.6bn ($198m) loss in the financial year.
And also carrying out the fresh position of the mobile phone network company over listing on Nigeria and payment of its fine giving by the industry regulator, Nigeria Communications Commission(NCC)for SIM deactivation among other penalties.
The appointment of the Shuter who previously worked for Vodafone, on Monday, to head the revamped senior management team followed the completion of a strategic review to position the telecoms company had reported a fall in its income with the “aim to revive the fortune.”
The loss according to the telco mainly stemmed from its tribulations with Nigeria’s telecoms regulator, the Nigerian Communications Commission. It was originally fined $5.2bn last year for its failure to disconnect unregistered SIM cards, as instructed by the regulator.
The Group executive chairman, Phuthuma Nhleko, commented: “MTN Group’s financial results for 2016 reflect the most challenging year in the company’s 22-year history, precipitated by a number of material regulatory, macro-economic and political challenges experienced across our regions. However, despite these difficulties, the business began to show encouraging first signs of a turnaround.”
As gathered, Shuter other new appointees are saddled with the management and services of the company’s obligations with Nigeria and upturn from its deficit in the new financial year. Recall that MTN Group has managed to negotiate a reduction in the fine to $1.7bn, which is to be paid over three years, while in another move that appears to form part of the settlement, the company is to seek a listing in the Nigeria Stock Exchange (NSE).
MTN Nigeria lost a lot of subscribers as a result of the SIM scandal, but its revenue in January 2017 was 16% higher year-on-year, although the depreciation of the naira against the US dollar affected the earnings before interest, tax, depreciation and amortisation (EBITDA) margin and increased costs from transactions carried out in US dollars.
As with other African telecoms operators, having attracted a large customer base in recent years, the company is now keen to increase its average revenue per user (ARPU) in order to boost income and profits. It is promoting mobile money services and encouraging greater data use. Group data revenue rose 19.7% to contribute 27% of Group revenue in 2016, as the company increased its network investment in its three biggest markets: South Africa, Nigeria and Iran.
MTN also admitted that it had had network, systems and customer service challenges in its main market, South Africa, MTN South Africa’s EBITDA, impairment of goodwill, net monetary gains and share of results of joint ventures and associates after tax were 31% higher in the second half of 2016 than in the first six months of the year.
This however informed the saddled responsibility in front of the new management of the largest telecommunication company in Africa.
