New CEO ends strike in three days and wants nontraditional business ventures to compensate for losses and boost revenue
Fresh from clinching a deal that ended a twomonth wage strike this week, newly appointed MTN SA chief executive Mteto Nyati has set his sights on nontraditional business ventures to compensate for the losses of dropping voice-call rates, a decline in local customer numbers, weak consumer spending and tough competition.
It took Nyati just three days to clinch the deal with the Communication Workers’ Union (CWU), which will see workers returning to work tomorrow.
In an interview with City Press, Nyati said he would now focus on attracting businesses to MTN’s IT services offerings, including e-commerce, intranets and private networks to improve revenue.
“Our direct business with individual consumers is declining because the price of voice calls is continuously coming down every day.
“If we just sit there and do nothing we’re going to find ourselves in deep trouble.
“We have to go and find new ways of compensating for the losses happening on the other side,” said Nyati.
Nyati takes over the hot seat from Ahmad Farroukh, who initially cited family reasons for his resignation, but surprisingly later emerged as chief executive of Saudi Arabian phone company Etihad Etisalat.
While Nyati said Farroukh “resigned for reasons that are known to him”, the CWU claimed Farroukh’s scalp, saying that he had not been able to manage the strike.
The union claimed Farroukh was “arrogant” during strike talks and that a similar deal to end the strike would not have been possible under his watch.
CWU general secretary Aubrey Tshabalala said: “Although MTN has had a hostile relationship with labour, that arrogance became intense under Farroukh.
“If anything, it was the workers’ strike that forced Farroukh to leave.
“With Nyati leading the negotiations to end the strike, it was clear he knew what he was doing and listened to us. That’s why the deal was struck with Nyati and not Farroukh.”
With MTN SA posting disappointing results last year compared with operations in other countries, the company is on a massive drive to convince companies to outsource their IT divisions to use MTN data centres.
“If companies are looking for data centres, we give them space where they can put their servers here [at MTN] and we run their IT,” said Nyati.
He said MTN Business’ multiprotocol label switching (MPLS) technology – which carries data from one network to another – was ideal for voice-over IP, another important strategy to boost growth.
“Many companies today are operating across borders, but they don’t have infrastructure that can connect them to other countries. We’ve put together the MPLS network, a separate system that companies use to send information across borders without any issues,” he said.
MTN was also hopeful that the lifting of sanctions in Iran, one of 22 countries in which the company operated, would allow the company to draw the more than $1 billion (R12.34 billion) it could not take out of Iran due to trade sanctions.
“Each year we had money we couldn’t take out of Iran. If the sanctions are lifted, we would have access to those funds and use them in our new ventures.
“It’s been a number of years and billions of dollars. It’s something that will help the group,” said Nyati, who joined MTN from Microsoft nine months ago to lead the group’s enterprise and ICT strategy.
Nyati was confident that MTN SA’s venture into “nontraditional” avenues would bring it new revenue.
“We’ve invested in platforms that enable easy fleet management where companies can track their vehicles in real time and send information to the driver or reroute the person, allowing companies to manage their fleets.
“There’s competition in that market, but we’re enabling existing players to use our system because the cost of running it is much lower since we’re sharing that system with others.
“It makes sense for companies if they’re trying to reduce costs,” said Nyati.
He said MTN was working with municipalities that wanted to remotely switch their electricity on and off because of load shedding. “We can do that and you will see more of it happening now with municipalities,” he
ArcelorMittal, the world’s biggest steel producer, is turning to rabbits to lower its carbon emissions. The company will spend €1.1 billion (R14.8 billion) to turn carbon monoxide into ethanol using a microbe normally found in the gut of these mammals. The ethanol can then be converted into biofuel.
ArcelorMittal announced this week that they would be installing bioengineering company LanzaTech’s revolutionary new technology at its new steel mill in Ghent, Belgium.
A spokesperson for ArcelorMittal SA, however, said the technology was not coming to South Africa just yet.
But ArcelorMittal’s vice-president of innovation, Carl de Maré, said if the commercial viability of the project were proven, the technology would be rolled out globally across the company’s mills.
As the world’s biggest steel producer, ArcelorMittal has factories in 19 countries and produced 93.1 million tons of steel last year.
“This new technology will enable us to convert some of these waste gasses into fuels that deliver significant environmental benefits compared with conventional fossil fuels,” said De Maré.
The star of the show is a customised microbe – the Clostridium rabbit-gut bacterium – that will capture carbon monoxide and convert it into ethanol.
ArcelorMittal, which has been working on this project since 2011, has signed a long-term partnership agreement with LanzaTech to use the customised microbe.
About 50% of the carbon used in the chemistry of steel making leaves the process as carbon monoxide. At the moment, the most common practice is to either flare the waste-gas stream or use it to heat and power the steel mill, releasing both carbon monoxide and CO2 into the atmosphere. But the new gasfermentation process will use the waste gas to produce fuel, lowering the steel mill’s carbon emissions.
Construction of the flagship pilot project in Belgium is expected to start later this year, with bioethanol production expected by mid-2017.
Construction will be in two phases, with phase one providing an initial capacity of 16 000 tons of ethanol per year by mid-2017 and phase two – which will be completed in 2018 – bringing the total capacity to 47 000 tons of ethanol per year.
The company’s idea is to sell its biofuel – as a by-product of the steel-making process – to run cars and aeroplanes.
It said every ton of bioethanol produced displaced 5.2 barrels of fuel and reduced the company’s CO2 emissions by 2.3 tons.
The technology is ground-breaking and was recently awarded the US’s highest greenchemistry honour, the Environmental Protection Agency Presidential Green Chemistry Challenge Award.
It is already successfully operating at steel mills in China, but not yet on the scale of the proposed Ghent plant.
ArcelorMittal will set up a dedicated company for the roll-out of this technology with strategic financial partners. Financing would be sought from a number of different sources, it said.
MAN OF THE MOMENT MTN SA CEO Mteto Nyati