Altron’s Mteto Nyati on bringing SA up to speed, digitally
Court ruling shores up growing confidence in digital transformation
Mteto Nyati, CEO of technology group Altron, says the court case it won last month against the City of Tshwane is a victory for digital transformation.
The Supreme Court of Appeal overturned the metro’s cancellation of a R1.2bn broadband contract awarded to Altron.
It is one of the first government IT projects to be funded by commercial banks, says Nyati. “Their confidence in funding similar projects would be gone if we’d lost this case.
“It’s an important victory for digital transformation in the country because we know that our metros and district municipalities don’t have the funds for these critical projects and so we rely on private financial institutions.”
If the institutions don’t have confidence that contracts for these projects will be honoured, they won’t invest in them, he says.
Covid-19 has highlighted the digital divide in the country and the need to address it with urgency.
“Look at health care, look at education. We need to invest in broadband infrastructure that connects schools, clinics, police stations. That is going to be absolutely critical,” says Nyati.
Altron is partnering with the department of co-operative governance & traditional affairs (Cogta) on digital transformation projects in Limpopo’s Waterberg district.
“We will see how we can lift the district through technology, by implementing broadband infrastructure. Once we can demonstrate how we can do things in that region then we can replicate it.”
The partnership with Cogta is only a month old and already there are “difficulties”, he admits.
“It doesn’t come naturally for government to partner with business.” There’s a lot of red tape and bureaucracy, he says.
“Decision-making may not be as fast as we want it to be.
“But this is our country. We’re here for the long haul. So we’ll continue to be engaged and see this thing through.”
What gives him hope is that the partnership, which is part of the Public-Private Growth Initiative (PPGI), has the support of the presidency behind it.
“The executive sponsor of the PPGI is the president himself, so this whole structure comes with a bit of power.”
He says he gets a sense from President Cyril Ramaphosa’s economic recovery plan that the government understands the urgency of digital transformation.
“There’s a strong push in that plan around digital transformation, in particular broadband infrastructure deployment.
“There’s been a commitment by the new Icasa [Independent Communications Authority of SA] board to auction spectrum. They’ve given timelines, which I now trust.”
The government’s new sense of purpose around digital transformation is the result of outside pressure, he believes.
“There has been such strong pressure from the [International Monetary Fund] to make a decision, to allocate the spectrum. I think that message has landed and we’ll see it being done next year in the time frame they’ve given.”
Talking about the president’s economic recovery plan as a whole, Nyati says there’s “nothing new” in it, which may not be a bad thing. “Maybe it’s a good thing because we don’t necessarily need more new plans. We need implementation and execution because that is what is going to get us out of the mess we’re in.”
Nyati, 55, has held senior leadership positions at IBM and Microsoft. He was CEO of MTN SA when he was recruited in 2017 to turn around an ailing Altron, which had been driven from the JSE’s blue-chip index by strategic missteps by the founding Venter family.
He has done so convincingly. The group reported last month that revenue for the six months to August was 7% higher, at R9.125bn, compared to R8.531bn seen at the same time last year.
Its share price rose 20% to R26.29, giving it a market capitalisation of R10.5bn.
Nyati says because of decisions taken three years ago it was ideally placed to benefit from the pandemic lockdown, which drove remote working trends.
“The resilience of the company is linked to some of the choices we made then.”
It got rid of assets that “don’t talk to our future strategy” and made “very specifically focused” acquisitions in cloud computing, data analytics and cybersecurity. These have paid off handsomely at home and in the UK, where the public sector has offered huge opportunities linked to government efforts to stimulate its Covid-battered economy.
Altron has a base of 20,000 customers in SA and 8,000 in the UK.
“Our priority is to cross-sell and up-sell our offerings within that base. But instead of selling other people’s technologies we’ll be building our own, and selling them here and in other emerging markets. As a result you end up with a high-margin business.”
The “headwind” to this “high skills” strategy is a lack of skills in SA.
“But we have very strong capabilities within our DNA and we’ve been developing our own skills.
“If we can do this we’ll be creating one of those companies that are so unique because most of the technologies coming from the company will be locally developed.
“That is what our country needs right now. We have problems whichwe see as opportunities because if we can come up with solutions to those problems we will have technology we can export to other emerging markets which have the same problems.”
He says SA’s “big enemy” is corruption.
He’s heartened by recent arrests but for too many perpetrators there are still no consequences — and “if there continue to be no consequences then we can forget about this country”.
He says underperforming state-owned enterprises need to be dealt with. “Some of them have to be privatised. We have to move and move quickly. Those that are not privatised need to get strong boards and competent executive teams.” Don’t even talk to him about SAA, he says.
He wants to see “more decisive leadership” from Ramaphosa. “The president’s mistake is trying to satisfy everybody. This has never been a good strategy. We need to see bold decisions being taken. Being unpopular is okay, as long as you know that what you’re doing is right for the country.”
We know our metros don’t have the funds for these critical projects and so we rely on private financial institutions Mteto Nyati