Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News
      MultiChoice scraps annual DStv price hikes for 2026 - David Mignot

      MultiChoice scraps annual DStv price hike

      20 February 2026
      What Gen Z really thinks about the tech world it inherited - Tinashe Mazodze

      What Gen Z really thinks about the tech world it inherited

      20 February 2026
      Showmax 'can't continue' in its current form

      Showmax ‘can’t continue’ in its current form

      20 February 2026
      Free Market Foundation slams treasury's proposed gambling tax

      Free Market Foundation slams treasury’s proposed gambling tax

      20 February 2026
      South Africa's dynamic spectrum breakthrough - Paul Colmer

      South Africa’s dynamic spectrum breakthrough

      20 February 2026
    • World
      Prominent Southern African journalist targeted with Predator spyware

      Prominent Southern African journalist targeted with Predator spyware

      18 February 2026
      More drama in Warner Bros tug of war

      More drama in Warner Bros tug of war

      17 February 2026
      Russia bans WhatsApp

      Russia bans WhatsApp

      12 February 2026
      EU regulators take aim at WhatsApp

      EU regulators take aim at WhatsApp

      9 February 2026
      Musk hits brakes on Mars mission

      Musk hits brakes on Mars mission

      9 February 2026
    • In-depth
      How liberalisation is rewiring South Africa's power sector

      How liberalisation is rewiring South Africa’s power sector

      21 January 2026
      The top-performing South African tech shares of 2025

      The top-performing South African tech shares of 2025

      12 January 2026
      Digital authoritarianism grows as African states normalise internet blackouts

      Digital authoritarianism grows as African states normalise internet blackouts

      19 December 2025
      TechCentral's South African Newsmakers of 2025

      TechCentral’s South African Newsmakers of 2025

      18 December 2025
      Black Friday goes digital in South Africa as online spending surges to record high

      Black Friday goes digital in South Africa as online spending surges to record high

      4 December 2025
    • TCS
      Watts & Wheels S1E4: 'We drive an electric Uber'

      Watts & Wheels S1E4: ‘We drive an electric Uber’

      10 February 2026
      TCS+ | How Cloud On Demand is helping SA businesses succeed in the cloud - Xhenia Rhode, Dion Kalicharan

      TCS+ | Cloud On Demand and Consnet: inside a real-world AWS partner success story

      30 January 2026
      Watts & Wheels S1E4: 'We drive an electric Uber'

      Watts & Wheels S1E3: ‘BYD’s Corolla Cross challenger’

      30 January 2026
      Watts & Wheels S1E4: 'We drive an electric Uber'

      Watts & Wheels S1E2: ‘China attacks, BMW digs in, Toyota’s sublime supercar’

      23 January 2026

      TCS+ | Why cybersecurity is becoming a competitive advantage for SA businesses

      20 January 2026
    • Opinion
      A million reasons monopolies don't work - Duncan McLeod

      A million reasons monopolies don’t work

      10 February 2026
      The author, Business Leadership South Africa CEO Busi Mavuso

      Eskom unbundling U-turn threatens to undo hard-won electricity gains

      9 February 2026
      South Africa's skills advantage is being overlooked at home - Richard Firth

      South Africa’s skills advantage is being overlooked at home

      29 January 2026
      Why Elon Musk's Starlink is a 'hard no' for me - Songezo Zibi

      Why Elon Musk’s Starlink is a ‘hard no’ for me

      26 January 2026
      A million reasons monopolies don't work - Duncan McLeod

      South Africa’s new fibre broadband battle

      20 January 2026
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • LSD Open
      • Mitel
      • NEC XON
      • Netstar
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Vodacom Business
      • Wipro
      • Workday
      • XLink
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Financial services
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Opinion » Hilton Tarrant » MTN bets the farm on financial services

    MTN bets the farm on financial services

    By Hilton Tarrant11 August 2016
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    hilton-tarrant-180What more is there to say about MTN? It’s been an especially horrific 12 months for the company (and shareholders). But the group is sitting with a very large problem (to be fair, it has many others, too): it is increasingly almost wholly reliant on three operations: South Africa, Nigeria and Iran.

    On an Ebitda basis, the first two accounted for 70% of group profits in the six months to 30 June 2016 (add Iran in, which it doesn’t because of equity accounting rules, and that edges up to 73%). Put another way, R70 out of every R100 in profits made by MTN across 22 countries was earned in just two of them.

    The group, for the first time, explicitly acknowledged this in the release of its 2015 financial results in March, saying that “earnings remain highly concentrated in a few markets with the associated volatility and risks as evident over the past few years. To this end management will continue to explore opportunities to address this over the medium term.”

    This is not a surprise to anyone, least of all MTN Group management, but the execution by former CEO Sifiso Dabengwa of the group’s vision of “leading the delivery of a bold, new digital world to our customers” would be best described as sleepwalking. It’s fiddled around the edges, searching for growth in new areas with precious little to show for it. Nothing has moved the needle and there is no indication that any of the moves it’s made to date will in the medium term.

    Even mobile money, the much heralded “saviour” of operators in emerging markets, remains relatively small. Revenue is up by 41% in the first six months, but R1,3bn equates to just 1,6% of the group’s reported turnover (and that’s to say nothing of profitability). MTN remains a mobile operator, with mobile data being the only real source of strong revenue growth.

    In recent months, it’s announced two significant (and directly related) moves that it hopes will go a long way to solving its biggest problem.

    Two primary executive appointments have made the market (and competitors) sit up and take notice. The first, rather obviously, is the appointment of Rob Shuter as group president and CEO (by latest 1 July 2017). Related is the appointment of Stephen van Coller as vice-president of strategy and mergers & acquisitions, effective 1 October 2016 (and Kholekile Ndamase as his deputy).

    Shuter joins from a year long stint on the Vodafone Group executive committee, where he assumed additional responsibility for its smaller operations in Europe. He has been CEO of its unit in the Netherlands since 2012, and was previously chief financial officer at Vodacom for a two-year period.

    Prior to his move to telecommunications, Shuter was at Nedbank for about a decade, first as head of M&A and then as managing executive for its retail unit. He also has M&A experience under his belt from his time at Standard Bank, and crucially worked with Phuthuma Nhleko at the bank.

    Van Coller has been CEO of corporate and investment banking at Barclays Africa Group (previously Absa) since 2009. He joined the group in 2006, having previously headed up a unit of the local Deutsche Bank operation. His career move is telling, and MTN (again, explicitly) detailed why he would be joining: “His substantial commercial experience will assist in the formulation of a revised strategy for MTN, particularly in the area of convergence between mobile telephony and financial services.”

    And, Ndamase, former head of equity financing at RMB, joins the group as deputy head of M&A. This is an astonishing turnaround for the company, which until now has had these critically different and important roles of strategy and M&A somehow merged into one (“group chief strategy, mergers and acquisition officer”).

    And MTN is already off to a flier, especially when compared to the four-and-a-half years under Dabengwa.

    Its second big move was last week’s announcement of a “deep and fundamental strategic review of its operations and processes”. In this, it was clear that “new revenue streams are expected to increase their contribution to revenue over the next 12 to 18 months”.

    It’s also resolved not to make the same mistakes as practically every other major operator globally, and will “embark on a process of housing new revenue streams, particularly digital services, outside the core business. This will allow for more agility and greater flexibility to accelerate growth in these areas.”

    Incoming MTN CEO Rob Shuter
    Incoming MTN CEO Rob Shuter

    I’ve argued previously that mobile operators don’t know how to be anything other than mobile operators, and that stands. Every decision is premised on defending average revenue per user (simplistically). That MTN is going to set “house” these new revenue streams outside of its core business means it’s come to this realisation, too. How successful it is in keeping these separate will impact directly on whether it can (and will) make the bold decisions that mobile operators are inherently incapable of making.

    Given the backgrounds and experience of Shuter, Van Coller and Ndamase (banking is in their DNA), as well as MTN’s colour around (specifically) Van Coller’s appointment, I can see only one outcome: there will be M&A activity, and it will be in financial services.

    Realistically, this is the only area that’s big enough to move the needle for MTN. Video always seems tantalising, but this tends to work better on the traditional cable TV model in more developed markets (plus, in Africa, there’s only one game in town).

    But success in financial services is not a forgone conclusion. Outside of East Africa, the penetration and profits of mobile money services remain low. And retail banking across the continent is not the cash cow some might think — just ask Standard Bank. This would need to be a move unlike any other seen in this sector to date and it would need to ideally be outside of those three countries its overdependent on, at least for now.

    An online payment service provider/processor wouldn’t be a stretch at all (but how big an impact would that have?). An entire bank is probably not on the cards (not least because of the regulatory and capital issues), but you wouldn’t discount a proper (and aggressive) joint venture with an established player on the continent, would you?

    • Hilton Tarrant works for immedia. This column was first published on Moneyweb and is used here with permission
    Follow TechCentral on Google News Add TechCentral as your preferred source on Google


    Hilton Tarrant Kholekile Ndamase MTN Phuthuma Nhleko Rob Shuter Sifiso Dabengwa Standard Bank Stephen van Coller Vodacom Vodafone
    WhatsApp YouTube
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleFacebook’s bid to be the new king of advertising
    Next Article Vodacom BEE scheme in JSE debut

    Related Posts

    MTN to buy back its own towers in R35-billion deal - Ralph Mupita

    MTN to buy back its own cellular towers in R35-billion deal

    17 February 2026
    Icasa gears up for South Africa's next big spectrum auction - Tshiamo Maluleka-Disemelo

    Icasa gears up for South Africa’s next big spectrum auction

    17 February 2026
    Global network rankings put just one SA operator on the map

    Global network rankings put just one SA operator on the map

    16 February 2026
    Company News
    Service is everyone's problem now - and that's exactly why the Atlassian Service Collection matters

    Service is everyone’s problem now – why the Atlassian Service Collection matters

    20 February 2026
    Customers have new expectations. Is your CX ready? 1Stream

    Customers have new expectations. Is your CX ready?

    19 February 2026
    South Africa's cybersecurity challenge is not a tool problem - Nicholas Applewhite, Trinexia South Africa

    South Africa’s cybersecurity challenge is not a tool problem

    19 February 2026
    Opinion
    A million reasons monopolies don't work - Duncan McLeod

    A million reasons monopolies don’t work

    10 February 2026
    The author, Business Leadership South Africa CEO Busi Mavuso

    Eskom unbundling U-turn threatens to undo hard-won electricity gains

    9 February 2026
    South Africa's skills advantage is being overlooked at home - Richard Firth

    South Africa’s skills advantage is being overlooked at home

    29 January 2026

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Latest Posts
    MultiChoice scraps annual DStv price hikes for 2026 - David Mignot

    MultiChoice scraps annual DStv price hike

    20 February 2026
    What Gen Z really thinks about the tech world it inherited - Tinashe Mazodze

    What Gen Z really thinks about the tech world it inherited

    20 February 2026
    Showmax 'can't continue' in its current form

    Showmax ‘can’t continue’ in its current form

    20 February 2026
    Free Market Foundation slams treasury's proposed gambling tax

    Free Market Foundation slams treasury’s proposed gambling tax

    20 February 2026
    © 2009 - 2026 NewsCentral Media
    • Cookie policy (ZA)
    • TechCentral – privacy and Popia

    Type above and press Enter to search. Press Esc to cancel.

    Manage consent

    TechCentral uses cookies to enhance its offerings. Consenting to these technologies allows us to serve you better. Not consenting or withdrawing consent may adversely affect certain features and functions of the website.

    Functional Always active
    The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
    Preferences
    The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
    Statistics
    The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
    Marketing
    The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
    • Manage options
    • Manage services
    • Manage {vendor_count} vendors
    • Read more about these purposes
    View preferences
    • {title}
    • {title}
    • {title}