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MTN chief Nhleko says he won't renew contract

By Zweli Mokgata | Mar 02, 2010 | COMMENTS [ 0 ]

PHUTHUMA Nhleko has confirmed he will be stepping down from his position as MTN chief executive and president following months of speculation.

Nhleko, who has been with MTN for the past eight years, said yesterday that he would continue as president and chief executive of MTN until March 2011, but would not renew his contract which ends on June 30 this year.

Nhleko agreed to assist with the transition once his successor was named.

MTN group chairman Cyril Ramaphosa said: "Given his knowledge and insights into MTN we have mutually agreed to explore other options for an ongoing association between Phuthuma and the group post of his service as president and CEO."

Nhleko, who holds directorships in over 10 other companies, did not specify what he would be doing after his resignation, but according to observers, he would not be in a rush to look for work.

According to the latest Sunday Times "Rich List", Nhleko's investment in MTN alone amounts to more than R630million.

Nhleko said: "I have given this decision very careful consideration. I feel it is the right time to secure the next generation of leadership for the group - and the right time for me personally to start thinking about the next phase of my career."

Nhleko's departure follows that of Rob Nisbet, the group's financial director, who resigned last year with an estimated R273million investment in MTN.

Nisbet announced his intention to resign during MTN's crucial negotiations to merge with Indian telecommunications giant Bharti Airtel. His announcement sparked wide rumours that he did not like the structure of the deal.

Afena Capital director Khulekani Dlamini said he was not surprised by Nhleko's decision, saying: "He has indicated in the past that he would not be renewing his contract."

Despite speculation that chief operations officer Sifiso Ndabengwa might be next in line as chief executive, Dlamini believes otherwise. "I don't think he'd (Ndabengwa) want it. In fact, I wouldn't be surprised if he also said at the end of this year that he'd like to step down," he said.

Dobek Pater, director of ICT research firm Africa Analysis, said Nhleko's decision might be linked to recent reports that MTN was considering relocating its offices to Dubai.

While the company has denied the rumours, Pater said it would still make sense for the company to move there considering the geographic location of the group's other key operations.

"While South Africa is still the group's biggest single revenue contributor, markets like Nigeria and Iran are already ahead in terms of subscriber numbers. Dubai is centrally located, but some people might have been reluctant to relocate," he said.

"Nhleko has been around for a long time anyway and the company is moving into a new stage of its development. He might feel he has done his part."


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