Publications
Partners
Johannesburg - MTN [JSE:MTN] chief executive Phuthuma Nhleko's resignation has re-ignited speculation that MTN is planning to move its head office to Dubai. Certain head office functions have already been moved there, and on Monday analysts expressed agreement that it made sense for the group and its new chief executive to establish themselves in Dubai.
The company's principal operations are now in the Middle East and West Africa, and all purchases of cellphones and network equipment go through Dubai.
Although delisting from the JSE is highly unlikely, a secondary listing in London or the Middle East is quite probable, reckon several analysts. All of its operations other than in South Africa already fall under MTN International, which is registered in Mauritius.
Dobek Pater, an analyst at Africa Analysis, says the group is now moving into a new phase in which South Africa is losing its importance as a market for the group. West Africa and the Middle East will become increasingly important. The composition of the whole group is busy changing - this is perhaps a ripe opportunity for the chief executive to exit, he said.
After eight years at the helm of MTN, Nhleko will resign after his contract comes to an end in June this year. The announcement follows only a few months after a proposed $23bn merger with India's Bharti Airtel fell through for a second time. Poor communication by top management following the failed transaction resulted in considerable ill-feeling between the market and MTN, and specifically Nhleko, Sake24.com heard from investor circles on Monday.
One top telecommunications analyst said that after the negotiations fell through had been inadequate communication about how MTN saw the road ahead. Instead, the strategy was rather ostrich-like.
Rob Nisbet, the former chief financial officer, also left MTN after the failed Bharti deal. The head of operations, Sifiso Dabengwa, is also expected to leave, which makes Christian de Faria, deputy president for West and Central Africa, the favourite for an internal appointment, the analyst explained.
De Faria was previously the chief executive of PT Excelcomindo Pratama, one of the largest cellphone groups in Indonesia, and head of Telekom Malaysia International, where he was responsible for international strategy.
The analyst reckons that MTN is likely to throw its net far and wide for potential external candidates. Nhleko will remain at the company until March 31 2011 to show his successor the ropes.
Afena Capital portfolio manager Khulekani Dlamini noted that MTN had a broad base of excellent managers, and that Nhleko's resignation was not a concern.
He believes there is every chance that the new chief executive will come from within, as the group has depth of management and MTN is a difficult company for an outsider to get a handle on. But in the future we could see executives appointed from elsewhere, such as the Middle East.
Although Nhleko has said nothing about his future plans, it has been agreed that alternatives for ongoing collaboration between himself and the group will be investigated. These could include options like a non-executive directorship or a background role in which Nhleko could investigate potential takeover targets.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.
