NEW CASH

New CEO ends strike in three days and wants non­tra­di­tional busi­ness ven­tures to com­pen­sate for losses and boost rev­enue

CityPress - - Business - XOLANI MBANJWA xolani.mbanjwa@city­press.co.za YOLANDI GROE­NEWALD busi­ness@city­press.co.za

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

said.

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.

PHOTO: MTN

MAN OF THE MO­MENT MTN SA CEO Mteto Ny­ati

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