South Africa's MTN has named Vodafone senior executive Rob Shuter as its new CEO as it looks to get its business back on track following a costly dispute with authorities in Nigeria.
Shuter is currently employed as CEO of Vodafone Group plc (NYSE: VOD)'s European cluster, but will take charge of the African operator next year and no later than July 1, said MTN Group Ltd. in a statement.
Former CEO Sifiso Dabengwa was forced to quit last November after authorities in Nigeria hit MTN with a $5.2 billion fine for its apparent failure to disconnect unregistered mobile phone users as instructed. (See Africa's Data Dilemma.)
Although the fine was subsequently reduced, and payment appears to have been settled, the imbroglio spooked investors and has forced MTN to make changes aimed at improving corporate governance and transparency within its organization.
In the meantime, MTN has been led by chairman Phuthuma Nhleko, who will revert to a non-executive role once Shuter takes charge. CFO Brett Goschen and a new vice president of M&A and strategy -- chosen but not yet named -- will assume extra responsibilities until Shuter joins.
MTN said the M&A and strategy vice president would join the company on October 1. His identity is to be revealed before June 30 but he is said to have a "wealth of banking experience" and will be tasked with increasing MTN's focus on new revenue streams.
Shuter has previously held senior roles within MTN rival and Vodafone subsidiary Vodacom as well as Standard Bank and Nedbank. Like the incoming M&A boss, he appears to have been chosen partly on account of his banking expertise, which MTN believes will be important as it develops a new business strategy.
In another executive appointment, Godfrey Motsa will become vice president of south and east Africa (excluding South Africa) on July 1.
Motsa was previously the chief officer of the consumer business at Vodacom, where he has also been employed as CEO of the DRC Congo and Lesotho operations.
MTN has also appointed three new non-executive directors as it looks to improve its risk and governance profile.
Those are Paul Hanratty, a veteran of investment group Old Mutual; Stan Miller, an associate of Russian businessman Len Blavatnik; and Nkululeko Sowazi, the head of African investment group KTH.
"MTN has weathered a rather difficult storm and will continue to review its governance and management operating structure to ensure that it operates at an optimum level and continues to replenish management talent to ensure a sustained growth of the business," said Nhleko in a company statement.
MTN's share price lost 30% of its value last year after Nigerian authorities announced they were fining the company $5.2 billion. While the stock remains 26% lower than on the day before news of the penalty broke, it is trading up 6.7% on a year-to-date basis.
The operator serves about 229 million people across 22 countries in Africa and the Middle East. Like other players in the region, it is now trying to boost revenues from the sale of mobile data and other non-voice services.
Subscriber numbers dipped slightly in the first three months of the year, compared with the previous quarter, due to disconnections in Nigeria, but were still about 1% higher than in the year-earlier period.
In its results statement for 2015, MTN indicated that profits after tax had fallen by about 37%, to around 23.6 billion South African rand ($1.6 billion), due largely to the impact of the Nigerian fine. Revenues remained largely unchanged at ZAR147.1 billion ($9.9 billion).
— Iain Morris, , News Editor, Light Reading