Is new boss Mteto Nyati up to MTN South Africa’s huge task?

Early in July, Africa’s largest telecom company MTN announced that Ahmad Farroukh, the CEO of its South African unit, was stepping down after citing personal and family reasons, though it later emerged that he had taken up a new role with Etisalat in Saudi Arabia. Many, however, attribute his resignation to the growing number of challenges MTN is having to contend with, most of which will have Mteto Nyati, the incoming CEO, up and running from August 1 when he officially assumes office.

First on his desk will be finding a lasting solution to the on-going strike action by workers, who are seeking higher wages and bonuses. Local daily Business Day says the strike has so far affected operations and may have resulted in a loss of customers. The striking workers—led by the Communication Workers Union (CWU)— are demanding a higher pay than the 8 percent pay increase MTN is offering. The subsequent chaotic scene seen outside MTN’s plush head office near Roodepoort in Johannesburg on Friday 29th of May, forced it to close some of its South African customer help centres, cutting off a significant portion of its 22 million customers in June.

Though Chris Maroleng, MTN’s spokesperson, revealed that more than 90 percent of the striking workers had returned to work, the company is yet to seal a lasting deal with the CWU.

MTN has also been struggling with dwindling sales amid stricter price regimes employed by regulators in recent times. Ahmad pursued cost cutting measures to minimize the impact on its revenue, but that hasn’t been enough to lift beyond the runner up position in the South African telecommunication market.

A questionable resume?

Nyati will be expected to steady the ship and align the company’s strategy towards unseating Vodacom, which is currently South Africa’s biggest telecom company by market share. Nyati is a tech expert, with stints at IBM and Microsoft, but he is considered relatively new to the telecom industry. “He lacks pure telecoms experience given his predominantly enterprise background,” explained Farai Mapfinya, head of equities at JM Busha.

His ability to handle the problematic labour unions have also been questioned. “We are also not sure whether he is up to speed with regards to dealing with unionised labour as the ICT enterprise space is dominated by nonunionised professionals.”

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