Sifiso Dabengwa made one mistake too many as MTN CEO

15 November 2015 - 02:00 By ASHA SPECKMAN

It was a torrid year for former MTN CEO Sifiso Dabengwa. While rival CEOs at Vodacom and Telkom have charted victorious courses, over the past few months Dabengwa has found himself at various crossroads. The final one cost him his job.His departure this week left the door wide open for his predecessor, Phuthuma Nhleko, in whose shadow Dabengwa has been operating since becoming CEO in 2011, to step in as executive chairman and mop up the regulatory mess in Nigeria, where MTN faces a $5.2-billion (about R72-billion) fine."He [Dabengwa] might have been good at being a chief operating officer, but he was not nearly as good at providing the strategic leadership role that one would expect from the CEO," said Dobek Pater, a director at Africa Analysis.story_article_left1Dabengwa's last few months at MTN have been challenging. It emerged recently that the company repeatedly ignored regulatory warnings to disconnect just over fivemillion unregistered sim cards on its Nigerian network. The kidnapping of a Nigerian politician by people using unregistered MTN sim cards was the final straw for regulators.In May, employees at the South African operations embarked on a strike over bonuses and pay that lasted until July, when an agreement was reached. But the strike contributed to a 4.9% decline in group revenue to R69.2-billion for the six months to June."He was not decisive," said Aubrey Tshabalala, general secretary of the Communications Workers' Union, on Tuesday while reflecting on Dabengwa.Under Dabengwa, who was chief operating officer from 2006 to 2010, MTN has lost out on lucrative deals such as an expanded network and spectrum-sharing deal after more than a year of talks with Telkom, after competition authorities worried about it limiting market competition.Meanwhile, rivals Vodacom and Telkom are engaged in separate transformational deals that will enable them to offer fixed and mobile products to businesses and consumers at an advantage over MTN.Unlike Nhleko, Dabengwa has been unable to find transformational deals for MTN. In 2013, the company failed to win a licence that would have expanded its operations to Myanmar, adding to its 22 regions stretching from the Middle East to Africa.Dabengwa's rule for the most part has focused on consolidation, particularly to streamline costs through Project Next, whereby back-office functions have been moved to a shared services hub.His theme of a "bold new digital world" has seen MTN invest in stakes in companies that tap into a range of internet services and aim to increase data usage.story_article_right2On the plus side, Dabengwa is credited with continued subscriber growth, from 164.5million when he became CEO to 231million reported for the half-year to June.Abri du Plessis, CEO of Gryphon Asset Management, said Dabengwa's leadership was unfairly compared to Nhleko's. "He [Dabengwa] is standing in big shoes."Du Plessis said of the Nigerian debacle that operators were competing fiercely and trying to "squeeze every bit out of it"."This is the result of that rotten portion of the industry that is coming to the fore. I guess he is more the fall guy than probably the guy responsible for this."..

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