Vodacom has by far the highest revenue and profit per employee out of the local mobile operators0, indicating that its staff members are more efficient and productive than its competitors.
Revenue per employee is calculated by dividing the total revenue of the company for the last twelve months by the number of full-time employees.
This gives the revenue generated per employee, which can be used as an efficiency ratio to show the efficiency and productivity of a company’s employees.
A variation of this formula – profit per employee – is sometimes used as an alternative measure of the efficiency and productivity of employees.
While this is one of the most universally applicable benchmarks for productivity, it can vary significantly based on industry, country, and company age.
This efficiency is therefore typically used to compare companies within the same industry, like the telecommunications industry.
Vodacom vs MTN vs Telkom
MyBroadband calculated the revenue and profit per employee at South Africa’s top telecoms providers based on their latest financial results.
Vodacom, with 7,641 permanent employees, annual revenue of R90.7 billion and an operating profit of 27.7 billion, leads the productivity race.
MTN, with 19,288 employees, annual revenue of R151.5 billion and an operating profit of R31.3 billion, is lagging behind Vodacom.
Telkom, with 15,099 permanent employees, annual revenue of R43 billion and an operating profit of R2.7 billion, is not very competitive.
The charts below show how the revenue per employee and profit per employee compare between Vodacom, MTN, and Telkom.
Telkom’s unique position
While Telkom’s revenue and profit per employee are lower than those of its main competitors, this is not unexpected.
Telkom is a far older company with legacy fixed-line networks which require more employees to maintain and operate.
The company is also well aware that it needs to improve efficiency and productivity, which is why it actively reducing its workforce.
In January, Telkom announced it would cut jobs due to weak economic conditions, a decline in fixed-line voice revenue, and the migration from fixed to mobile data products.
Telkom group communications executive Mooketsi Mocumi said the company had to address inefficiencies in the business.
The first phase of these cuts affected three of Telkom’s business units – Consumer, Openserve, and Trudon.
During this phase, Telkom approved 2,271 voluntary severance packages (VSP) and voluntary early retirement packages (VERP).
The second phase, which is taking place between May and August, will look to cut staff at the Telkom head office.
The image below provides an overview of Telkom’s organisational restructuring and job cuts.