Vodacom to save R150m through staff outsourcing
A COST-CUTTING drive by Vodacom in home base South Africa will result in up to 107 network operations staff being outsourced to a third party from February next year.
The outsourcing will be conducted in five phases and will affect other areas in the company, according to sources.
The network operations team comprises 139 permanent employees. Only 28 positions were retained as part of a redeployment process for affected staff. These positions were advertised internally.
The company kick-started the outsourcing in July this year and has concluded agreements with Ericsson, which will absorb employees and render network services to South Africa’s largest cellphone telecoms provider. At least 17 companies put in bids for the contract with Vodacom.
This week, Ericsson will meet affected Vodacom staff to discuss contracts. According to documents seen by Business Times, official letters will be sent to staff who have accepted the offer on November 30.
Ericsson was chosen as a partner because of its strength and experience in the managed services area, said Vodacom spokesman Tshepo Ramodibe.
“It was a company that presented the best plan to take care of our transferred employees and offered opportunities for . . . career growth.”
This will a be a once-off process. “This is a specific managed services contract and we don’t have plans beyond this implementation.”
Vodacom is 65% owned by the UK’s Vodafone, which indicated in its 2015 annual report that it will focus on cost-containment across operations.
Vodacom has confirmed it has signed a managing partner relationship with Ericsson rather than a pure outsourcing contract. It still retains full control of its network assets. Some 107 employees will be transferred.
Vodacom’s Ramodibe said: “We’re investing in other areas, which will be the growth drivers for the future.” These areas included digital services.
Vodacom has reportedly told staff that it aimed to save about R150-million annually through outsourcing its operations employees. The company is a market leader in South Africa and subscribers increased 3.5% to 33.7 million in the six months to September.
It invested R4-billion in its network. Group operating profit grew 7.8% to R10-billion.
Sources say staff might not get their full benefits — such as a well-subsidised medical aid and a cellphone allowance of R3 600, plus a subsidised sim card for spouses — when they are transferred to the service provider.
Ericsson is apparently paying an R800 phone allowance and R500 for a spousal sim.
Vodacom is opposing a $14billion lawsuit in the Democratic Republic of Congo after being sued by the controlling shareholder in Vodacom’s minority partner in that country over claims that its international unit helped to undermine the businessman’s position as a statutory director of Congolese Wireless Networks.