A Mobile Giant Engulfed By Controversies

After a series of missteps, MTN, which operates in 22 countries, has left a bitter taste in the mouths of shareholders, customers and business leaders alike. What will incoming CEO Rob Shuter, who starts work in March, have to do to restore the company’s reputation?

- Lloyd Gedye

An expected loss for this financial year due to a whopping fine in Nigeria. An ongoing investigation in that country into the alleged illegal repatriation of money as well as a planned listing in Lagos. A brewing freedom of expression scandal in Cameroon and an ongoing investigation by the Cameroonian government into unpaid taxes.

The purchase of a major stake in an Iranian internet service provider. Angry black shareholders whose payouts have been delayed. A South African market where it has been shedding subscribers and has faced heavy criticism for its decision to appoint a white CEO to take over from acting CEO and current MTN chairperson, Phuthuma Nhleko.

It seems Rob Shuter, who takes the reins as the MTN Group CEO in mid-March, already has a very full inbox.

Nigerian fine hits hard

In October 2015, MTN’s world was turned upside down with the announcement by the Nigerian Communication Commission (NCC) that it was slapping the mobile giant with a 1.04tr naira fine ($5.2bn at official exchange rates at the time), for failing to meet a deadline to disconnect 5.1m unregistered SIM cards in Nigeria.

This was equivalent to more than two years of MTN’s Nigerian profits, while MTN Nigeria accounts for almost a third of MTN Group’s total revenue.

The magnitude of the fine was “astonishing” and it was clear to see the “hand of political interest” at play, said founder of World Wide Worx, Arthur Goldstuck. In the wake of the fine, MTN CEO Sifiso Dabengwa resigned and Nhleko was appointed to act.