UPDATE 2-South African union says 2,000 workers strike at mobile group MTN

May 20, 2015 1:03 PM

* Workers demand 10 pct wage hike

* MTN shares fall 3 pct, lag rival (Adds details from demonstration)

By Tiisetso Motsoeneng

JOHANNESBURG, May 20 (Reuters) - About 2,000 South African workers of MTN Group went on strike on Wednesday demanding more pay, the first major industrial action to hit Africa's biggest mobile phone operator since its formation in 1994.

About 700 workers, clad in red T-shirts and carrying placards with slogans such as "MTN integrity is gone," temporarily blocked the main road leading to MTN's head office, where they delivered their demands.

South Africa's mostly black labour force is increasingly restive two decades after the end of apartheid, with perceptions prevalent that the earnings made in a range of industries have not flowed fairly to workers.

"MTN continues to rake in profits as the biggest mobile operator on the continent and cannot deny the very people who make it possible to prosper the right to share in its success," Thabo Magalane, deputy general secretary of the Communications Workers Union, said in an address to workers.

The CWU wants a 10 percent pay rise, a 16 percent bonus payment and higher allowances for work done over weekends and holidays.

"We can no longer tolerate the arrogance and plain refusal of the company to meet legitimate, reasonable demands of workers," Magalane said.

Ahmad Farouk, head MTN's South African operations, had to be escorted by police back to the company's offices through the crowd of protesters.

MTN, along with rivals in Africa's most advanced economy, is trying to contain costs in the face of tough competition that has hit profit margins.

The company, which reported a 9 percent increase in full-year profit in March, employs about 6,500 people in its home market, where it trails rival Vodacom by subscribers.

MTN spokesman Chris Maroleng had no comment.

MTN's shares slid 3.3 percent to 228.01 rand by 1231 GMT, on track for their biggest daily percentage decline in about two months and lagging closest rival Vodacom Group which was down 1.4 percent.

MTN was founded with the government's help just after the end of apartheid in 1994. With a market value of $36 billion, MTN is the second-largest company with a primary listing in Johannesburg. Former chairman Cyril Ramaphosa is South Africa's Deputy President.

(Editing by James Macharia. Editing by Jane Merriman)