MTN Said to Outsource South African Stores to Brightstar

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MTN Group Ltd. agreed to outsource its South African retail operations to Brightstar Corp. and 800 jobs may be affected as it seeks to cut costs, according to a person familiar with the matter.

Brightstar will take on management of the mobile-phone company’s chain of shops selling handsets and services in South Africa and may take on some of the MTN staff, said the person, who asked not to be identified because the contract has yet to be announced. Miami-based Brightstar will also operate most of Johannesburg-based MTN’s distribution and logistics operations in the country, building on a services agreement signed with the continent’s biggest wireless operator in 2011.

Erik Hofmeyer, a spokesman for closely held Brightstar, declined to comment when contacted by phone, referring questions to MTN.

MTN, which has more than 220 million subscribers in 22 countries in Africa and the Middle East, has cut staff in South Africa to reduce costs and is trying to boost sales to corporate customers to compete with Vodacom Group Ltd., the country’s market leader in terms of subscriber numbers.

South African revenue declined 3.9 percent to 38.9 billion rand ($3.2 billion) last year after the communications regulator cut the amount MTN and Vodacom can charge smaller competitors to end calls on their networks. That compared with a 6.4 percent gain in total sales to 146 billion rand.

MTN shares gained as much as 4.1 percent, the most since March 5, and traded 3.6 percent higher at 212.42 rand as of 11:32 a.m. in Johannesburg. That values the company at 392 billion rand.