The new Chief Executive Officer of South Africa’s MTN, Rob Shuter, has been brought in to boost profits at Africa’s biggest mobile phone group after a $1.7 billion fine in Nigeria, by persuading its 200 million clients to use their handsets to store money and pay bills.
But the hunt for returns by the outsider, the current European head of Vodafone and a former banker, will throw MTN into an unfamiliar world of finance with increasing regulatory risks as authorities step up efforts to combat illicit money transfers.
It will also pit MTN against African rival Safaricom, which is 40% owned by Vodafone, and whose mobile money business M-Pesa helped offset falling prices for basic telecoms, convincing investors that financial services is the industry’s next growth area.
“It will not be easy for MTN or any other operator to replicate the M-Pesa success story because a regulatory loophole in Kenya meant that Safaricom did not need a formal banking partner or license to launch services,” said Ovum telecoms consultancy analyst Richard Hurst.
Shuter will start no later than July 2017 and replaces Sifiso Dabengwa who resigned last November after a the fine in Nigeria exposed corporate governance flaws at MTN.
[By Tiisetso Motsoeneng via Reuters]
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