MTN Group disclosed today it plans to lay off about half of its 850 managerial staff in South Africa, its home market. The announcement is well below the number of job cuts predicted by South Africa’s Solidarity union in August.
Stiff competition especially at home and abroad has stalled MTN’s growth. The company’s revenue from South Africa fell by 7 percent to R19.2 billion ($1.8 billion) in the first half of this year while margins also declined. Its market share dropped by nearly three percentage points to 31.9 percent. In its largest market of Nigeria, MTN said tougher regulation has contributed to a sluggish subscriber growth.
However, in what is a light of good new, MTN said earlier in the day that it was raising its full-year subscriber guidance, saying that it plans to add 17.5 million net subscribers by full year 2014, compared with previous guidance of 17.25 million. Another good news for the company is its data revenue, which is up 34 percent so far this year, and now contributes to nearly 18 percent of its total revenue.
The company’s subscriber base also grew in South Africa in the third quarter of the year, between July and September. It added 1.4 million new subscribers in the country but lags behind rival Vodacom. Its subscribers base across Africa and the Middle East grew to 219 million users.
According to its website, MTN South Africa has nearly 6,200 employees. In the last 12 months, the company cut 138 employers.
The company published reduced revenues in its latest results. However, MTN is still the leader in South Africa, in competition with Vodacom, and Cell C although increased competition has meant price reductions.