How MTNs challenges and opportunities in Uganda mirror its operations in Iran
Mazen Mroue’s recent but short stint as chief executive officer of MTN Uganda ended after two years of a rapid stabilisation programme that has kept the South African giant still at the top of a vibrant telecommunications market beset by numerous challenges. His appointment to MTN Irancell as chief operations officer is a serious mark of confidence in the abilities of the Lebanese born techie-turned-CEO, as Iran is MTNs second largest operation in a group of 22 countries.
Iran today is as challenging as Uganda was when Mazen arrived. Even though it is the MTN Group’s second largest out of its 22 operations, it only increased subscriber numbers by only one per cent at end March 2014, bringing the number to 41.8mn - less than anticipated. The modest result was blamed on an economy weakened by United States sanctions against the Middle Eastern nation.
The same sanctions led to Finnish technology company Nokia ceasing operational contacts with MTN Irancell last year. And for more than a year, MTN Group has tried without success to repatriate US$650mn from Iran. Plus, the company is embroiled in a US$4.2bn legal battle with rival telecommunications company Turkcell, which claims that MTN acted illegally to get a telecommunications license in Iran that Turkcell believes was theirs.
Mazen’s task is clearly cut out for him, and will not be made easier by the fact that MTN owns 49 per cent of the company, and Iran’s IEDC (Iran Electronic Development Company) owns the majority 51 per cent.
Challenging ground
Mazen, as he is known on first name basis by most Ugandans, arrived in Uganda in June 2012 to a market where the telecommunications leader was believed to be rapidly losing ground due to an unstable network; competition was heating up with the merger of two other networks that will bring subscriber numbers dangerously close to MTNs majority; and reports were rife of embezzlement and corruption at the helm of the company’s mobile money arm.
Coming from MTN Ghana, where he was chief information officer and only briefly acted as CEO, followed by a one-year stint in Liberia as CEO, it was not clear to observers what Mazen’s key focus would be especially in light of the fire-fighting required and his short tenure at the head of a relaxed country operation.
Armed with a Masters Degree in Engineering Intellectual Systems & Networks, and a Harvard Business School Leadership Development Certificate, Mazen was thrown straight in to the deep end of the Mobile Money fraud scheme in which it was believed that senior staff were involved in theft of up to US$7mn through falsified MTN Mobile Money transactions. Leaving the details of the case to the legal teams, he dove straight into people issues, and believes it paid off.
“...people are the heart, engine and drivers of our operations. We have worked intensively on our cultural operating system to achieve a strong belief and clear understanding of the goals and objectives of MTN Uganda. As a result, we managed to improve staff morale and motivation,” he said.
A few months after taking office, though, MTN was faced with another major challenge - the ‘merger' of numbers two and three in the telecommunications sector, Airtel and Warid (quite frankly more of an acquisition than a merger), created a threateningly close competitor in Airtel with reportedly 7.7mn subscribers to MTNs just-over 8mn. But even this, Mazen says, was not the most important challenge the business faced in Uganda; that position went to diminished network and services quality, caused by vandalism.
“In the last 12 months alone, for instance, MTN Uganda recorded more than 200 incidents of infrastructure vandalism attributed to theft of fibre cables and also by road construction activities. Also, there has been an upsurge in the theft of fuel from our generators, and theft of backup batteries, which affect transition from the national electricity grid to standby generators when there is a power fluctuation or a power cut,” Mazen explained.
MTN operates numerous base stations and telecommunications towers across the country, all of which run on diesel-powered electricity generators introduced in the late 2000s when electricity supply off the national grid was highly unreliable or, for many hours of the day, non-existent. The national shortfall in electrical supply that led to a reliance on generators, also led to an increased incidence of vandalism as the generator fuel, backup standby batteries and even generators themselves were on high demand countrywide.
“And this also increases the workload of our network engineers and customer operations teams who have to react to this, and causes poor quality of service yet ensuring that our customers have the best in quality and service delivery is paramount in our day to day business operations,” Mazen stressed.
This is an issue in spite of the company having sold off its towers in 2012 to the American Tower Corporation (ATC), to rid itself of the headache of infrastructure roll-out and management.
"The sales of network towers helped us to focus on core business operations and achieve faster roll-out of new network coverage and expansion. We are now able to commission new Network sites on monthly and continuous basis without interruption across the year,” Mazen said.
But the base stations still remain their problem - and not just MTN alone. Vandalism has become a rallying point for the telecommunications companies, around which all competition issues are buried and a common approach created to lobby the government.
"The Telcos in Uganda have submitted a proposal to the Government seeking a policy declaration treating the Telecom assets as national resources. We believe this is a step in the right direction to give Telecom operators much more supporting environment help to attract more foreign direct investments. The policy will make the life of the people vandalizing Telecom assets much more difficult,” he said.
The approach is telling of his favourite quote from the continent after 17 years in telecommunications in Africa, Mazen quotes one proverb that resonates with him the most: “If you want to go quickly, go alone. If you want to go far, go together.”
“During my different assignments for the last 17 years we had to go far and quickly at the same time. That means we had to quickly continue finding new ways to change customer behaviours and make an effective impact on the people we work with,” Mazen said.
New opportunities
The results of that approach read like a public relations dream, all impressive verifiable figures from subscriber numbers (up over 30 per cent to almost 10mn) to data revenue (grown by 330 per cent earned from three million subscribers) and even the number of Ugandans holding senior positions in other MTN operations (now 12) as a sign of the success of his people development strategy.
A lot of the success, Mazen attributes to the youthfulness of Uganda’s demographic - more than 77 per cent of Ugandans are said to be below the age of 30. At his second public event in Uganda as CEO, Mazen made mention of this and said the company’s marketing strategy would focus on products for the youth. It has worked. The company reported an increase by end December 2013 of 14.4 per cent in subscriber numbers standing at 8.8mn; and total revenue increasing by 17.8 per cent, a large segment of which was in data revenue attributable to new, data-drive social media platforms and other products.
These numbers are now being handed over to Mazen's replacement in Uganda, Brian Gouldie, until now chief marketing officer of MTN South Africa, who announced his presence with a tweet that read: “Good morning MTN Uganda. A new sunrise, looking forward to the opportunities it brings.”
So are the close-to-nine million MTN subscribers, and 560,000 indirect employees who depend on the company for a livelihood.
