MTN Group is believed to have struck a deal with Brightstar Corp a US based distributor of mobile phones and other devices to outsource its retail outlets in South Africa. This new development could cause negative impact on employment. Analysts say more that 800 could be affected.
Brightstar would take on the management of MTN’s chain of retail stores and chances are high that it may take on some of the MTN staff. The Miami-based firm would also operate most of the mobile operator’s local distribution and logistics operations.
MTN’s South Africa unit has of late been struggling to increase in competition and a 36% decline in interconnect revenue due to lower mobile termination rates (MTRs).
In March 2015, MTN reported a 3.9% decrease in local revenue for the year ended December 2014, to R38.9 billion, while earnings before interest, tax, depreciation and amortisation (EBITDA) slipped to R12.5 billion, from R14 billion before.
In August 2014, MTN informed union, Solidarity , of its intention to execute a restructuring process that would affect up to 847 managers.
The union later said that most of its affected members accepted voluntary retrenchment packages, while some were placed in alternative positions at MTN. MTN South Africa CEO Ahmad Farroukh previously mentioned that the group had completed its retrenchment process.