MTN Announces South African Staff Reductions amid Market Competition
MTN Group plans to lay off as many as 850 members of staff as it continues to contend with slowing revenue and tough competition in its home market.
A union official from the South African mobile operator made the announcement off the back of increased competition and a sudden contrast to the decades of robust industry growth that had been seen prior to the recent slowdown.
Africa's largest telecoms group has expanded rapidly across the continent and in the Middle East over the past two decades but faces stiff competition at home from South African market leader Vodacom.
Margins have also been squeezed by a price war launched by smaller operator Cell C and after regulators decided to cut mobile termination rates (MTR).
"We have just received a massive retrenchment notice at MTN," said Marius Croucamp, an official at the Solidarity union, which largely represents skilled workers.
The process could be concluded by the end of October, he said.
MTN's chief human resources officer, Themba Nyathi confirmed that the company had begun restructuring to improve efficiency but said the process is at an early stage.
"MTN SA will continue to review its cost structures, including employee costs, to ensure better alignment with revenue performance and the changing needs of the business and our clients," he said in a statement.
MTN's revenue from South Africa fell by seven percent to R19.2 billion in the first half of 2014 while margins also declined. Its market share dropped by nearly three percentage points to 31.9 percent.
MTN South Africa has nearly 6,200 employees after letting go 138 in the past 12 months.
"It's certainly a symbol and a symptom of MTN's struggle to maintain market share in South Africa," said Arthur Goldstuck, head of industry research firm, World Wide Worx.
"It's a reflection of the pressure on its margins as mobile termination rates come down dramatically and also as it is forced to compete on price on both data and voice."
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.