MTN promises to open new flagship stores

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MTN says it will open new shops, as a stand-off with its Branded Channel employees over potential job losses escalated last week.

MTN has been at loggerheads with employees that fall under its Branded Channel over the sale of stores and the employees have threatened to go on strike this week.

The employees allege that with the sale, salaries and benefits have been drastically reduced. In some instances, they claim, up to two-thirds of their current earnings have been cut.

However, the mobile operator says its transformational strategy, which has seen the telco offload some its flagship stores, is not a sign of financial distress or abandoning its staff.

MTN says as a matter of fact, it will open more shops this year and 50 new stores will be opened over three years.

According to the telco, its transformational project is focused on regionalising its existing store footprint with its existing BBBEE level one dealers.

“These existing dealers have been MTN Business partners for between 10 and 15 years each and are by no means new entrants,” says MTN SA’s executive for corporate affairs, Jacqui O’Sullivan.

“To be clear, MTN is not under financial pressure to drive this transformational strategy. In fact, MTN is planning the opening of 20 new stores in 2020 and a further 50 new stores within the next three years.”

On Friday, O’Sullivan told ITWeb that MTN has been clear “that this strategy is driven by our desire to transform this channel, as MTN’s objective is to actively seek to place more stores in the hands of black owners and in so doing, deliver on the clear desire of government, driven by the minister of communications, to bring new entrants to the telecommunications sector”.

Last week, MTN confirmed it had received offers to purchase from several existing store owners but no sale agreements had been concluded.

Documents seen by ITWeb show a list of “stores to be transacted to expandable dealers” which was sent to the employees.

The document lists MTN stores in Wonderboom Junction, Pinecrest, Vereeniging, The Square Farramere, Cavendish and Golden Acres as among those to be transacted.

Further, the documents show the benefits employees will lose include paternity leave, paid overtime, company medical aid contribution, provident fund, life and disability cover, funeral benefits and maternity leave.

To cap it, the documents show salaries will be reviewed from 1 April.

Currently, MTN Branded Channel employees receive a basic fixed package, 10% provident fund, 2.5% risk cover, R200 airtime and 60% medical aid employer contribution.

From next month, those affected will only receive a fixed basic salary plus commission, the documents show.

The unions have condemned the move by MTN, vowing to help the employees.

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