Shuter’s bank experience seen as an asset to MTN
ROB Shuter’s background in banking and his experience running a multiterritory operation for a large global telecommunications operator make him an ideal candidate to take the reins at MTN Group next year, experts said this week.
JSE-listed MTN, which announced Shuter’s appointment on Monday, said the senior Vodafone executive would take the helm by July next year — a long wait, but presumably required because of restraints placed on him by his current employer.
Shuter has been CEO of Vodafone’s operations in Europe for the past nine months and headed the UK-headquartered group’s operation in the Netherlands for more than four years.
He was promoted to that position from Vodacom, where he was group chief financial officer based in Johannesburg.
Before that, he held senior positions at both Nedbank (MD of retail banking) and Standard Bank (head of investment banking). He had been in the running to take the reins at Nedbank, with Mike Brown eventually pipping him to the post.
Although MTN has come under fire
We will head towards e-wallet payments, where the mobile device will replace the debit or credit card
from its largest shareholder, the Public Investment Corporation, and the Black Management Forum for hiring a white CEO — the forum described the move as running counter to transformational requirements — its decision to appoint Shuter has been widely welcomed by analysts.
In particular, his experience in both telecoms and financial services puts him in a good position to help MTN play in two industries that are rapidly converging, especially in emerging markets, they said.
“Apart from driving expansion into financial services at MTN, he may also prove to be the right person for further expansion through acquisitions,” said Dobek Pater, MD at specialist IT, telecoms and media consultancy Africa Analysis.
“MTN has indicated in the past that it is considering acquisitions in the telecoms space, although this could be expanded into IT services, and possibly the financial sector, depending on market regulations.”
Pater said financial services was “almost a natural area of expansion” for mobile communications companies in light of their large subscriber bases and the fact that technology is turning the mobile device into a payment mechanism.
“We will head in the direction of e-wallet payments, where the mobile device will replace the debit or credit card as a payment tool,” he said.
Apart from mobile money and payment solutions, MTN could expand into insurance products, where Vodacom is already enjoying some success, and in time into other financial products, too, Pater said.
Vodacom’s failure with M-Pesa in South Africa should not detract from the opportunities in mobile financial services elsewhere in Africa. MTN South Africa’s own mobile payments NEW-WAVE MOBILE: Customers at an MTN store in the V&A Waterfront. Telecoms and financial services are converging platform, launched with Standard Bank, has also not lived up to expectations.
“The reason mobile money products have not worked well in South Africa is due mainly to the diversity of payment mechanisms available and greater access to ‘mainstream’ financial products by individuals and businesses — unlike in many other markets in Africa — so there is greater financial inclusiveness,” said Pater. “However, I think that e-wallet solutions will change this in future.”
Many of the markets in which MTN operates, especially in Africa, are not as advanced as South Africa, he added.
Tim Parle, senior telecoms consultant at BMI-TechKnowledge, said Shuter had an “excellent blend of experience within a mobile network operator and outside one”.
Although MTN had not been as successful as Vodafone with M-Pesa — it was launched in Kenya to huge success and has also taken off under Vodacom’s watch in Tanzania — the group had established solid mobile banking and payments businesses in some of its markets, he said.
Parle echoed Pater’s view that South Africa was a much tougher nut to crack in mobile financial services.
“The latest Amps figures . . . show that 65% of South African adults aged 15-plus personally have some banking product,” he said. “According to the World Bank, in the rest of subSaharan Africa, just 34% of adults had an account in 2014 — although that was up from 24% in 2011.”
But financial services was not the only big growth opportunity that Shuter would have to pursue, Parle said. “There are other battlegrounds such as connectivity and content that cannot be ignored.”
Pater said Shuter’s expertise could also be brought to bear on mergers and acquisitions, an area where former CEO Sifiso Dabengwa — who quit in November last year following the record regulatory fine in Nigeria — was seen as relatively weak.
“Being a financial boffin does not necessarily mean that you are a dealmaker, however, as was the case of [interim executive chairman and former CEO] Phuthuma Nhleko, but I think Shuter may be better suited to driving mergers and acquisitions in the company than Dabengwa,” said Pater.