OPINION | Doing business the right way
MTN is still one of the resounding successes of democratic SA. So is Capitec.
The departures of Phuthuma Nhleko and Riaan Stassen from the boards of MTN and Capitec mark the end of an era for this generation of business leaders. Unrivalled entrepreneurs, they were among the most successful business people of our first quarter-century of democracy. Their respective businesses came into being at the dawn of the new SA, symbolising the bright promise of a reborn, prosperous nation in which a liberal market economy would unleash the entrepreneurial spirit of the willing.
Nhleko and Stassen come from totally different backgrounds – Nhleko from the newly-empowered black business elite, and Stassen from the old money of Afrikaner business circles.
In the space of a generation, both have made millions of people in SA and abroad wealthy beyond their dreams, thanks to the dividends that have flowed into the pockets of ordinary people. Capital knows no race or skin colour. Profits. That’s the foundation of a wealthy society.
These are the kind of entrepreneurs all South Africans should emulate. Only determination to work hard and create wealth will transform us into a prosperous society.
MTN snatched the second cellphone licence to compete head-on with the partially state-owned Vodacom. Vodacom, then half-owned by Telkom, enjoyed an artificial monopoly of lucrative state contracts while MTN had to earn its keep in the market.
Having embraced BEE early on, and with Nhleko as CEO for nine years, MTN went on to obtain operating licences in no fewer than 23 countries. Of course it was not all plain sailing, particularly with regard to the investments in Iran and Nigeria.
But Nhleko was undaunted, insisting that even warlords needed to communicate and would thus protect the telecommunications equipment that served them. It proved to be an inspired and far-sighted approach.Cellphone towers are as valuable to warlords as breweries are. While all else around them would often be reduced to rubble, a brewery and a cellphone tower would be left intact. Otherwise how would the combatants unwind and check on family after a busy day of murder? It’s also thirsty work. In Nigeria, too, MTN fell prey to allegations of letting Boko Haram abuse its equipment.Even so, MTN investors smiled all the way to the bank, with the group at some point topping R440bn in market capitalisation. At half that today, MTN is still one of the resounding successes of democratic SA.So is Capitec. Launched to compete in a stiff oligopoly of four large banks that arrogantly tried their damnedest not to compete against one another, Capitec championed the consumer, offering low-cost banking and easier credit. Today Capitec is bigger than both Absa and Nedbank in terms of market capitalisation. In terms of customer numbers it ranks fourth with 11.4-million. All this from organic growth within SA’s borders. Instead of chasing acquisitions, Stassen and his team got down to business and made banking more accessible to the wider public.Investors have enjoyed a growing stream of annual dividends...