Ferdie Moolman, who spent most of his career at MTN, took over as the CEO of the company's South African business late last year. However, much of his previous experience was not specifically related to South Africa. He left the country at the beginning of the century, managed MTN in Nigeria until 2021, and then returned to the group as Chief Risk Officer before taking the role in South Africa.
Moolman openly discusses how a long absence from the country affects a leader's intuition. In an interview with TechCentral last week, he noted: 'When you are away from the country for so long, no matter how many times you return, you lose sight of what is happening.' He warns that anyone returning after such a long break and assuming they still understand the country starts from a wrong premise.
He admits that he himself fell into a broader misconception. Moolman joined the MTN South Africa board of directors as a non-executive director in 2021 and thought the business looked simple from that position. He recalled: 'Before, I looked at [my predecessor] and thought, this is easy, man. Just do this, just do that—until it's you, the dog catching the car.'
In his view, the danger lies in MTN executives coming from other markets speaking the same language and assuming the operating mechanisms are identical. This is not the case in South Africa, and differences are apparent in almost every aspect of operations.
For instance, MTN largely avoids dealing with devices outside of South Africa due to the existence of a grey market. In most other regions, the cost of a device sold by the operator is unaffordable compared to grey imports, so consumers have never been accustomed to choosing a network based on a good deal on a device. In South Africa, they did, and Moolman emphasized that the consequences go far beyond revenue, affecting package structure and customer churn management.
How risk management is conducted in the business
Differences also exist in the ratio of prepaid to postpaid services. In other MTN operations, prepayment accounts for over 90% of revenue, whereas in South Africa, this figure approaches half. This changes the approach to risk management, as a mature postpaid base carries significantly higher credit risk than is typical in other group regions.
Even in the postpaid segment, MTN's financial metrics differ from Vodacom's. Moolman attributes this to the initial stage of market development: Telkom was originally a fixed-line business, and Vodacom's main shareholder consisted of affluent households with landlines, which naturally migrated to Vodacom, while MTN developed a more prepaid model. Although MTN has a postpaid base, its profile is different.
Another significant contrast is observed in how funds enter MTN. In Nigeria, most top-ups come through banking channels—the subscriber uses a banking app for direct time purchase. MTN interacts directly with banks, and if intermediaries exist, they are technical rather than commercial, providing connectivity rather than holding funds. Moolman reported that money from top-ups in the country's largest bank reaches MTN's account the next morning, or even immediately.
South African intermediaries possess both technical and financial functions. Moolman explained: 'If a top-up occurs and there is an intermediary, I can wait up to 60 or 90 days for those funds to reach my bank account because they pass from the bank to the intermediary, and then to us.'
This context explains his remark at a recent MTN Group media day: he does not understand why a multinational operator does not have direct relationships with banks. He carefully clarifies that this is not aimed against Blu Label, which he considers extremely important for MTN, but acknowledges the sensitivity of the issue. He added: 'If I start talking directly to Capitec, Blu Label will be upset.' According to him, when MTN approaches a bank, potential damage to other existing relationships must be considered.
He argues that the Blu Label model has still evolved. The company started with prepaid electricity before mobile communication displaced it, and its new universal voucher—applicable for balance top-ups, paying electricity, and other services—functions as a form of cash. In his opinion, the importance of this is that it shifts the decision away from the cashier. A consumer who previously had to decide at the point of purchase what portion of the money would go to electricity and what to communication can now buy one voucher and decide at home, spending as needed.
This is why intermediaries remain part of the value chain, even as MTN gets closer to its own customers: unlocking the economy in townships is a task MTN cannot claim to perform better on its own. 'If we claim to understand the entire retail market, we will make a mistake.'
Maturity of wholesale markets
The only area where South Africa surpasses other group markets is in the wholesale segment. Moolman describes it as a separate business from consumer telecommunications, not an extension of it. Nigeria is only beginning to move in this direction, partly thanks to agreements with virtual mobile network operators and partly due to an arrangement with a new player that resembles the MTN South Africa deal with Cell C, where spectrum is part of the exchange.
The corporate segment is also more developed in South Africa than in other MTN markets, but lags behind local competitors. Telkom has BCX, which faced its own issues but is more mature than anything MTN has built, and Vodacom relies on the corporate sector model of developed market Vodafone.
