MTN Business, the enterprise services arm of mobile operator MTN, intends pursuing partnerships with IT companies as well as acquisitions as it seeks to grow its contribution to group revenues to 20% within the next three years.
That’s the word from MTN South Africa chief enterprise officer Alpheus Mangale, who says MTN Business has an aggressive growth target that it wants to meet through both organic and acquisition-led growth.
He declines to comment what percentage of group revenues MTN Business currently contributes, saying MTN hasn’t historically provided this information. It intends doing so in future, however.
But the 2018 target of 20% of group revenue from MTN Business is “significant growth on where we are now”, Mangale says.
Its biggest markets are South Africa and Nigeria, but its focus is continent-wide, and not only on markets where MTN operates a mobile network, he says.
MTN has sought to grow its enterprise services business in the past year through a number of top-level executive appointments, including Mangale, who previously headed Cisco in South Africa, and Mteto Nyati, who was previously MD of Microsoft South Africa.
Mangale says MTN “fundamentally believes” that the consumer retail and enterprise business markets are different and require separate organisations. However, he says, the businesses need to leverage common infrastructure where it makes sense. “Our blueprint across all our operating entities will follow that strategy,” he says.
Although MTN Business does not have specific acquisition targets on the table right now, Mangale says the company will be aggressive in pursuing the right opportunities when they present themselves.
“The type of companies we’d be interested in are not ones that only give us a footprint in South Africa,” he says. Acquisitions could flow from partnerships with IT companies that plug gaps in MTN’s service offering, he adds.
MTN will, however, not pursue acquisitions for the sake of it. “Buying a too-large organisation not aligned with you leads to the risk of culture misalignment,” says Mangale.
“What we are looking at specifically are companies that will complement our capabilities… These companies don’t have to be huge, but they should be well aligned with the MTN organisation.”
He says MTN won’t only go after companies founded in South Africa. Indeed, it could pursue acquisitions of IT services businesses elsewhere in Africa that don’t operate in South Africa.
MTN Business’s goal is to be the principal technology services provider for companies looking for market or geographic expansion. This includes South African companies expanding on the rest of the continent. Governments are also a big focus area, says Mangale.
Although MTN Business doesn’t have a set budget for acquisitions, Mangale says the group board is “fully behind our expansion strategy.”