Cell C started a war and lost. They may not be around for much longer

Cell C declared a war on tariffs, and lost. Now South Africa’s third largest mobile network might be in trouble if its CEO, Jose dos Santos, is to be believed.

“If current deals in the industry all pass regulatory muster we might not be around in a few years’ time,” dos Santos told Parliament earlier this week. “We need remedies to allow small players to stay in the game,” he said.

“Cell C is in a very difficult position,” says Editor of TechCentral.co.za Duncan McLeod. “However, I think dos Santos is being overdramatic.”

Cell C is losing the war they started

“Cell C is the smallest player in a market that has, through their own actions, become very competitive,” explains McLeod.

“Vodacom’s acquisition of fixed-line operator Neotel and a network-sharing deal between MTN and Telkom Mobile is going to make life very difficult for the small operator. It’s hard to see how Cell C will be able to compete if these deals go through.

“Cell C does not have the balance sheet to contest on a like-for-like basis,” says McLeod. “Vodacom, for example, have spent R5.5-billion in the past six months to expand its mobile network. It’simpossible for Cell C to match this!"

Bye-bye Cell C; hello Orange or Bharti Airtel?

McLeod does not think Cell C is about to go away. “However, shareholders might soon say ‘enough is enough’ and decide to sell the company. We could see a large, international player such as French multinational Orange and India’s Bharti Airtel coming in.”

Listen to the Soundcloud clip for more detail.

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