Johannesburg - Mobile service provider Altech Autopage has tried to mitigate retrenchments amid the company eyeing a February 2016 shutdown, said its managing director.
Local technology group Altron said in a cautionary announcement in May that it planned to sell the subscriber base of Autopage, which sells phone contracts on South Africa’s major mobile networks.
In September, Altron further announced that local mobile networks are set to pay it R1.5bn for its Autopage subscriber base.
Altron further said that ongoing mobile termination rate reductions and continued industry and consumer deflationary pressures were chief reasons for the Autopage closure. For the Altron’s interim results for the period ended August 2015, the group also said that the discontinued operations of Altech Autopage, Altech Node and Powertech Transformers together recorded a loss of R99m.
And in an interview with Fin24, Altech Autopage’s managing director Boyd Chislett said that the mobile service provider’s shutdown is progressing as the business attempts to minimise job losses.
"When you close a business down - that's what we're doing - when you've got 500 - 600 people that potentially could be affected and retrenched, you times that by six or seven in terms of people that get affected, I mean it's huge, and it's huge for management,” Chislett told Fin24.
Competition Commission feedback
"It's emotionally very tough, but I think we've done a very good job in mitigating a lot of those retrenchments up until now,” he said.
Chislett told Fin24 that, thus far, about 250 of its staff are expected to move within the Altron Group or to other companies, such as an external debt collector that will take over Autopage’s debtor book for three months after the business closes.
As a result, Chislett said that about 250 people, at this stage, face being retrenched but this could be lower by next year if more of Autopage’s staff find work elsewhere.
In the meantime, the processes of shutting down Autopage are in full swing as the business waits on regulators to give it the go ahead to sell its subscriber base to mobile networks Cell C, MTN and Vodacom.
Chislett said that dependent on when Autopage gets feedback from the Competition Commission on the sale of its subscriber base, the business could officially shutter in February next year.
"It's all dependent on whether the Commission will revert back on the timelines that we're planning and that they're saying they'll deliver to us. So, on that assumption, we are looking to have migrated all three customer bases by the 29th of February. So, a fairly tight timeline. It conveniently coincides with our year-end, which is the end of February,” Chislett told Fin24.
"We have to ensure that the (Competition) Tribunal sits in January, early in January and on the assumption that they support the transaction and get the requisite approvals, we'll start migrating the bases in probably the first week of February in a staggered fashion. But 29th of February is where we're aiming for. And I think as we stand now, we're on track,” Chislett said.
About 105 Autopage franchise stores will also close “on the last working day of the last migration”, he said.
Some of these stores will be overtaken by telecoms seller GloCell, Vodacom, MTN and Cell C, while others could just close altogether, Chislett added.
Following the shutdown of Autopage, measures will also be in place to deal with any customer disputes.
He said that Autopage has service level agreements with networks that one-to-one customer interaction will span for three months after migration. This means that Autopage’s call centre will continue to operate, it will have an electronic customer service tool on its website and its systems will be accessed by the networks.
Chislett said that Autopage plans to either resolve disputes or give customers the “benefit of the doubt” to prevent churn of subscribers.
Moreover, Autopage's closure is set to happen in a step-down fashion.
"We'll probably after migration still have 140 staff members that will be employed for at least three months and each month it will decline and then we'll have a skeleton staff for three months. Thereafter we'll wind up systems and the like. So, certainly the customers mustn't fear lack of service thereafter,” Chislett told Fin24.
"We've planned well. My team are under huge pressure to deliver...we've got a strong executive team,” Chislett said.