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MTN says new CEO Shuter to join early

As data traffic doubles.

MTN Group said  Rob Shuter will start as chief executive officer more than three months early as the South African wireless carrier reported data traffic that more than doubled and raised its full-year forecast for subscriber growth.

Shuter, who was hired from Vodafone Group in June, will join Johannesburg-based MTN on March 17, the company said in a statement on Monday. The carrier, Africa’s biggest by sales, had previously said he would start by July 1. Phuthuma Nhleko, who returned to lead the wireless company last year, plans to appoint a new chief financial officer by the end of the year and return to his role as non-executive chairman when Shuter starts.

“During the quarter the group embarked on a material transformation project, focusing initially on its key operations of Nigeria and South Africa,” Nhleko said in the statement. “A dedicated transformation office was established” and there are “hard targets set for the next 12, 18 and 24 months.”

Shuter’s official starting date comes as the company and its bankers face an investigation in Nigeria into allegations that its local unit illegally repatriated $14 billion, which MTN denies. The shares have slumped 14% to six-year lows since Nigerian politicians raised allegations that the wireless carrier broke the law when repatriating funds from the country over ten years starting in 2006. MTN agreed to pay a 330 billion naira ($1 billion) regulatory fine in Africa’s most populous country in July.

MTN’s data traffic jumped 142% in the nine months through September while voice volumes rose 1.8%. Group subscribers increased 0.9% quarter-on-quarter to about 235 million, including a 2.5% increase in Nigeria, its largest market, and a “marginal” decline in South Africa.

The shares jumped 4.9% to R112.26 at of 10am in Johannesburg, the biggest gain in four months. The stock closed 2.36% higher at R109.52. The stock rebounded from six-year lows reached after the latest Nigerian allegations were announced.

MTN’s data traffic soared 142% in the nine months through September while voice volumes rose 1.8%. Group subscribers increased 0.9% quarter-on-quarter to about 235 million, including a 2.5% increase in Nigeria, its largest market. The company raised its full-year target for subscriber growth to 9 million from 8.1 million.

“The news of the new CEO coming sooner is encouraging,” Peter Takaendesa, a senior analyst at Mergence Investment, said by phone from Cape Town. “It also looks like a real turnaround strategy has been implemented by Phuthuma with capital expenditure being accelerated.”

MTN’s spending increased 11% over the nine-month period to R21.2 billion ($1.5 billion), with more than 4 600 3G and 4G sites added.

The company “continues to refute the allegations that MTN Nigeria had improperly repatriated funds from Nigeria,” the carrier said. “MTN Nigeria will strongly defend any action that would be prejudicial to its interest.”

MTN has begun repatriating funds from its Iranian business and expects to conclude the process over the next six months, it said.

© 2016 Bloomberg

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