Telecoms firm plans outsourcing to cut costs

TELECOMS group Vodacom was planning to outsource maintenance to cut costs, the company said yesterday, raising union concerns amid a strike by workers at MTN.

The domestic cutbacks at Vodacom, which is spending billions of dollars to expand its data network, is part of a wider trend in the mature South African telecoms market, where peers MTN and Telkom are also cutting costs.

About 2 000 MTN workers have been on strike for two months over a pay dispute.

Vodacom said there would be no job cuts and that it was consulting with its employees. “Vodacom is investigating the possibility of consolidating existing outsourced maintenance contracts and potentially outsourcing some of our field maintenance activities,” spokesman Richard Boorman said.

“There would be no job losses if the envisaged changes go ahead,” he said.

Two company sources said China’s Huawei, Alcatel-Lucent, Ericsson and Neotel were among companies shortlisted for a three-year maintenance contract, which would start in November. The Communication Workers Union ( CWU), whose members are leading the MTN strike, has expressed concern about Vodacom’s plans.

“We are shocked and dismayed again that you are busy outsourcing our members without consultation with the union,” CWU general secretary Aubrey Tshabalala wrote in a July 7 letter to Vodacom.

Employees said this could be the first step in wider cutbacks that would include job cuts.