The MTN Group has been hit by a double whammy that has the potential to negatively affect its services in its two biggest markets.
In Nigeria chronic fuel shortages brought telecoms firms‚ banks and flights to a standstill on Monday, with MTN warning this may lead to a network shutdown‚ while in SA a strike by employees over wages and bonuses has entered its second week and threatens service disruptions.
Nigeria is MTN’s biggest market with 61 million subscribers. It generates almost a third of its revenues there.
MTN Nigeria’s spokeswoman Funmilayo Onajide said services were “already degraded and some of our customers are already feeling the impact”.
Nigeria depends on fuel imports to meet more than 70% of its domestic needs and pays importers to guarantee cheaper local prices.
According to Bloomberg‚ fuel companies claim they were owed 200-billion naira (R11.8-billion) in outstanding payments by the outgoing government of President Goodluck Jonathan.
MTN spokesman Chris Maroleng said the group was monitoring the situation and would “implement all necessary contingencies to avoid any possible negative impact”.
MTN had business continuity plans that would be implemented in a crisis‚ he said.
Momentum Asset Management’s Wayne McCurrie, said the situation was unlikely to have a negative effect on earnings and expected MTN to implement its plans should the need arise.
“MTN is not massively reliant on fuel but (on) the general state of the Nigerian economy‚ which is entirely reliant on oil‚” said McCurrie.
MTN’s share price was down 2.30% and closed at R224. In the past year, the MTN share price had tracked the dollar oil price‚ he said.
In SA‚ MTN had proposed the appointment of an “independent binding arbitrator” to help resolve an impasse with the Communication Workers’ Union over issues including demands for higher wage increases‚ bonus payouts‚ and the recognition of the union.
The strike saw stoppages by more than 1000 of the union’s members and brought service at its 808 call centres to a halt‚ angering many of the network’s 28 million subscribers in SA.
Workers are demanding a 10% wage increase and a 16% guaranteed bonus.
The union’s deputy secretary‚ Thabo Mogalane‚ said MTN had agreed “in principle” to give the union recognition and the terms would be discussed before an agreement was drafted.
MTN stuck to its offer of an 8% bonus and said it was better than what the union initially demanded.
MTN head of human resources Themba Nyathi, said salary increases would be granted on performance targets being met and “will not be applied in a blanket manner”.
“MTN will not replace its performance system with a model that does not recognise personal contribution to performance. Any staff member can achieve any increase if a performance target is met. This policy affects all 23 operations across the globe‚” he said.
Unease in MTN’s big markets
In Nigeria chronic fuel shortages brought telecoms firms‚ banks and flights to a standstill on Monday, with MTN warning this may lead to a network shutdown‚ while in SA a strike by employees over wages and bonuses has entered its second week and threatens service disruptions.
Nigeria is MTN’s biggest market with 61 million subscribers. It generates almost a third of its revenues there.
MTN Nigeria’s spokeswoman Funmilayo Onajide said services were “already degraded and some of our customers are already feeling the impact”.
Nigeria depends on fuel imports to meet more than 70% of its domestic needs and pays importers to guarantee cheaper local prices.
According to Bloomberg‚ fuel companies claim they were owed 200-billion naira (R11.8-billion) in outstanding payments by the outgoing government of President Goodluck Jonathan.
MTN spokesman Chris Maroleng said the group was monitoring the situation and would “implement all necessary contingencies to avoid any possible negative impact”.
MTN had business continuity plans that would be implemented in a crisis‚ he said.
Momentum Asset Management’s Wayne McCurrie, said the situation was unlikely to have a negative effect on earnings and expected MTN to implement its plans should the need arise.
“MTN is not massively reliant on fuel but (on) the general state of the Nigerian economy‚ which is entirely reliant on oil‚” said McCurrie.
MTN’s share price was down 2.30% and closed at R224. In the past year, the MTN share price had tracked the dollar oil price‚ he said.
In SA‚ MTN had proposed the appointment of an “independent binding arbitrator” to help resolve an impasse with the Communication Workers’ Union over issues including demands for higher wage increases‚ bonus payouts‚ and the recognition of the union.
The strike saw stoppages by more than 1000 of the union’s members and brought service at its 808 call centres to a halt‚ angering many of the network’s 28 million subscribers in SA.
Workers are demanding a 10% wage increase and a 16% guaranteed bonus.
The union’s deputy secretary‚ Thabo Mogalane‚ said MTN had agreed “in principle” to give the union recognition and the terms would be discussed before an agreement was drafted.
MTN stuck to its offer of an 8% bonus and said it was better than what the union initially demanded.
MTN head of human resources Themba Nyathi, said salary increases would be granted on performance targets being met and “will not be applied in a blanket manner”.
“MTN will not replace its performance system with a model that does not recognise personal contribution to performance. Any staff member can achieve any increase if a performance target is met. This policy affects all 23 operations across the globe‚” he said.
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