Market commentators say MTN SA's new CEO - although not an unknown quantity - will have to prove himself at the helm of the mobile operator, and comes at a time when the company is faced with serious challenges.
The country's second-largest mobile provider yesterday announced it has appointed group chief enterprise officer Mteto Nyati as CEO, following the abrupt departure of Ahmad Farroukh, who is joining Saudi Arabia's Etihad Etisalat (Mobily) as chief executive.
Nyati's appointment comes a week after MTN confirmed Farroukh's resignation, initially stating the move was "unavoidable due to personal and family reasons".
However, some analysts have expressed surprise at the speed with which MTN SA announced Nyati's role, even though he does have extensive experience in the ICT space, having been MD of Microsoft SA before joining MTN in October last year. Prior to that, he held various senior positions at IBM.
Ovum analyst Richard Hurst says he is surprised at the pace of the MTN decision. "The speed at which they did it is surprising. Immediately, questions arise about whether they followed the proper processes, or whether they were simply caught up in a storm," he says.
But Hurst adds Nyati's experience is likely to offset some of these concerns, and says there will most probably be little fallout about his appointment. However, he says Nyati is more likely to be plagued by a host of high-level challenges facing MTN at this point.
Challenging position
"The South African market presents a number of challenges for MTN. The labour issue [ongoing strike by the Communication Workers Union (CWU)] is the most obvious one, but not the most difficult.
"It will be interesting to see how he deals with SA's competitive telecoms environment and how he will counter the ongoing consolidation and new entrants into this space."
ICT commentator Adrian Schofield also notes MTN's haste in appointing Nyati as CEO, but says Farroukh's resignation created a gap that needed to be filled quickly.
"And it needed to be filled by someone who grasps the challenges faced by MTN in SA. Nyati has the right background, experience and expertise, based on his performance at Microsoft," he explains.
But Schofield adds he does not think Nyati finds himself in a particularly enviable position either. "Where he picks up right now is having to fix the relationship with the CWU. On top of that, he has to deal with the lack the lack of growth in the SA market. But I do think his leadership style will allow him to make friends and allies rather quickly."
Schofield says Nyati's immediate problems include dealing with a mature local market, a lack of new products and a cumbersome regulatory environment.
"The new CEO will need to be nimble and will need to bring a new vision and culture to MTN SA to revitalise it."
Wait and see
Dobek Pater, a telecoms analyst with Africa Analysis, says it remains to be seen what Nyati achieves as CEO of MTN SA, but notes there are two main aspects he should be focused on.
"Firstly, he should be focusing on developing the enterprise side of MTN Business and looking to establish content partnership with other players. In other words, MTN SA needs to become a content provider, which is a key component if it is to be more than just a transmission network."
In addition, Pater says Nyati will have to concentrate on MTN SA's competitiveness in the prepaid market and look at putting in place a strategy where it can partner with over-the-top players, in time for when VOIP starts making a serious impact on voice revenue.
"Secondly, the other thing is how to position MTN's network so it is a key delivery tool for a host of services," says Pater, adding the operator should look at moving into the provision of other products and services.
"They should look at financial products and other services whose delivery can be expedited via the network. They can certainly look at partnerships in this space."
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