MTN handing retail stores to Brightstar: report

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 is according to Bloomberg, who reported that as many as 800 jobs could be affected, citing a person familiar with the matter.

Brightstar would take on the management of MTN’s chain of retail stores, “and may take on some of the MTN staff” Bloomberg said, adding that the Miami-based firm would also operate most of the mobile operator’s local distribution and logistics operations.

MTN’s South Africa unit has struggled amid an increase in competition and a 36% decline in interconnect revenue due to lower mobile termination rates (MTRs), the group noted in its most recent financial report.

Earlier in March, MTN reported a 3.9% drop 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 last year, MTN notified union, Solidarity, of its intention to implement a restructuring process that would affect up to 847 managers.

The union later noted that most of its affected members accepted voluntary retrenchment packages, while some were placed in alternative positions at MTN.

In a recent interview with BusinessTech, MTN South Africa CEO Ahmad Farroukh said that the group had completed its retrenchment process.

MTN did not respond to BusinessTech by the time of publication, while Brightstar referred Bloomberg’s queries to MTN.

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MTN handing retail stores to Brightstar: report