The world is changing fast and to keep up you need local knowledge with global context.
MTN Group President and CEO Ralph Mupita speaks to Bronwyn Nielsen at WEF 2023 in Davos about the respective challenges that markets in developed and developing countries will face in the short term as well as globalisation, which he believes is here.
Ralph Mupita on key factors to take back from WEF
I spent about 80% of my time meeting suppliers and partners. There are three things I will certainly be taking back. Firstly, on the global outlook, it is going to be a shallower recession and some markets might even avoid recession. That seems more probable now than it did a quarter ago. When you look at developing markets such as the ones we operate in, I think we are in for at least another 12, possibly 24 months of challenge. Many markets are fiscally challenged. They have to go to the IMF for support. We’ve seen it in Egypt, Zambia, Ghana, etc. The second point is around globalisation. There has been a narrative that we are in a deglobalising world. I think globalisation is here, it is just the form that is changing. There is a much more diversified and resilient form of globalisation that is being talked about. The final point is technology. Obviously as MTN, we are in the tech space and have been largely interested in the discussions about satellites and the space economy. For us as MTN, how we think about operating with terrestrial as well as space assets. And then artificial intelligence and what is going on around that.
How best to structure the MTN business
I cannot say we are defensive; we are relatively more resilient as a sector. The demand for telecommunication continues to be on the growth cycle, and we are still seeing mid-teen service revenue growth. Smartphone penetration across our markets is about 56%. Many of our customers do not have access to the internet. A lot more of the markets we operate in are realising that part of the way out of the challenges is to build a digital economy. We are not completely unaffected. Inflation is impacting us. So, how do we go about pricing our products when there is inflation? It is not possible for us to absorb all the inflation. We are always bringing costs down and thinking about how to manage inflation sustainably. We have to pass some of that on to customers, unfortunately, to sustain the investment. We are thinking about which decisions or opportunities deserve capital and which ones we simply do not allocate any capital to. We are still growth-oriented but it is a disciplined form of capital allocation in an environment where it could be quite challenging.
Upcoming elections in Nigeria
We always watch the political economy issues. As a corporation, we are apolitical by nature. Our focus is to deliver to shareholders and broader stakeholders. It has been peaceful so far, and that’s a positive. In the next couple weeks, the elections will come through. Right now, we are focused on continuing with the investments in the business in Nigeria. We spend $2 billion on CapEx annually. A third of that is in Nigeria. So, the Nigerian team is focused on accelerating 4G and 5G.
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