As Reunert finalises its exit from the telecommunications market, the group has moved to limit the impact on the employees of its ill-fated subsidiary Nashua Mobile.

The Competition Tribunal this week approved the sale of Nashua’s subscriber base to mobile operators MTN and Vodacom and service provider Altech Autopage without conditions after the concerns of the 519 job losses expected from the closure of Nashua were dealt with.

Reunert committed to absorb 77 Nashua employees, with other measures, such as sourcing jobs at other companies interested in the skills of about 120 Nashua staff, under way.

Despite these efforts, 322 of Nashua Mobile’s 519 direct employees would be retrenched and have accepted termination compensation.

The company had implemented an employee assistance programme to make the newly retrenched “more employable”.

Further, another 258 employees at more than 60 Nashua-operated retail outlets could also be negatively affected; however, measures to limit the exposure of these employees were also under way, with the employees facing retrenchment already having accepted termination compensation.

Vodacom, MTN and Autopage agreed to advertise job vacancies – if any emerged at the respective companies – to the retrenched Nashua employees in addition to the standard recruitment procedures of each company.

The Competition Commission was “satisfied” with the measures to minimise job losses and had recommended the Competition Tribunal approve the sale of the subscriber base to the parties.

Vodacom and MTN bought their respective subscriber bases for a combined R2.26-billion, excluding value-added tax (VAT), while the dealer agreements with Telkom and Neotel, which would continue to service their respective subscribers, were terminated by Nashua.

Nashua explained that it was not expected to generate acceptable future returns for its parent company in a “saturated, highly competitive” market amid the declining independent mobile telecommunications service provider (ISP) segment of the telecommunications industry.

During the financial year to September 2013, the Reunert subsidiary reported a 6% decline in revenue to R6.8-billion, while operating profit declined by 24% from R839-million to R636-million.

The Competition Tribunal noted that the numerous acquisitions of ISP’s by the mobile network operators over the last decade had reduced the number of ISPs active in South Africa from 14 to two – Nashua and Autopage.

Autopage parent company Allied Electronics (Altron), which would pay Reunert up to R95.75-million, plus VAT, for 65 000 Cell C subscribers, previously assured that there was an upside to being the remaining independent service provider in South Africa.

Autopage was operated under the auspices of the newly formed Altron Telecommunications, Multimedia and Technology business after the parent company significantly restructured its organisation last year.

Altron TMT group executive and Altech CEO Craig Venter said Autopage achieved subscriber growth of just short of 5% at 1.37-million during the financial year ended February, with churn maintained at “better than industry acceptable” levels.

While revenue for Autopage decreased 9% to R5.5-billion during the year to February, and average revenue per user (Arpu) continued on a slow downward trend, the Arpu’s for new subscribers and increasing full-circle data and telephony offerings to enterprises were encouraging.

Altron CEO Robert Venter previously told Engineering News Online that Altron planned to diversify Autopage’s offering from purely GSM (global systems for mobile communications) to converged services, integrating voice, data and multimedia, on the back of a fast evolving market.

The unit, which was now well positioned to provide customers and enterprises with differentiated network choices and offerings, would narrow its focus to the automation and improvement of systems, cost-cutting initiatives and enterprise market penetration, with an end-to-end communications offering including mobile, data, private automated branch exchange, or PABX, and voice-over Internet protocol.