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Pressure mounts on MTN South Sudan

Pressure mounts on MTN South Sudan

MTN's South Sudan operation is reportedly ready to lay off over half of its local staff compliment, a large portion of its foreign staff and is cancelling expansion projects.

A Reuters article published on 29 March quoted Khumbulani Dhlomo, Head of Corporate Services, as saying the company had reduced the foreign staff numbers by 75% and the intention is to lay off 55% of local staff.

Dhlomo told Reuters that subscriber numbers had decreased by 10% since October 2015, with more losses expected this year.

Reaffirming the reported figures, Dhlomo told ITWeb Africa that the company is indeed undergoing a restructure, brought about by what he described as "the dire economic situation in South Sudan".

"We are planning to downsize staff as a means of controlling costs and we have had to cut down on all expansion projects due to exchange rate movement which shifted from SSP2.96/1US Dollar to the current SSP42/1US Dollar. This has changed since they changed monetary policy from fixed currency to floating currency on 16 December 2015."

In terms of what this means for the company's domestic operations in the South Sudan region, Dhlomo said only that a number of initiatives have been put in place to make the business stable and profitable. "We are a business that is here for the long term but then obviously long term also depends on sustainability and shareholder return, amongst other factors," he added.

In January MTN South Sudan made headlines after allegations of compensation discrimination and a wage dispute between management and workers. Dhlomo denied the allegations and sources have since demanded negotiations with management.

According to MTN's annual financial 2015 results for the year ended 31 December 2015, presented on 3 March, Sudan was identified as among regions with ongoing challenges impacting the Group's growth.

The Group reported net Forex losses of R434-million due to the depreciation of the South Sudanese Pound by 509% against the US Dollar.

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