More Africa NewsSouth Africa: Why Cell C signed a new roaming deal with Vodacom

January 14, 2021by myles0

There’s nothing unusual about Cell C’s decision to migrate its contract and mobile broadband customers to Vodacom’s radio access network – it’s all part the company’s new strategy.

That’s according to CEO Douglas Craigie Stevenson, who said in an exclusive interview with TechCentral on Thursday that the company plans to use both the Vodacom and MTN networks to provide cellular services to its customer base.

He confirmed that Cell C recently concluded an “expanded roaming agreement” with Vodacom. This deal was signed last month and comes after the company trumpeted a similar agreement earlier in 2020 with MTN, which many in the market had assumed was some sort of exclusive arrangement.

Not so, said Craigie Stevenson, adding that “exclusivity” in the local telecommunications sector is a “swear word”.

“There is nothing extraordinary” about the new pact with Vodacom, he said. “It is exactly in line with our strategic intent.”

The new roaming agreement is for 3G and 4G services; under the old deal, which expired in November, Cell C could access only 2G and 3G bearers through Vodacom, Craigie Stevenson said.

Virtual RAN

He emphasised that Cell C is not migrating customers to Vodacom, but is moving them to a new radio access network (RAN). What this means, in practice, is that Cell C contract customers are moving to a Cell C-controlled “virtual RAN” provided by Vodacom on Vodacom’s network. Prepaid customers, meanwhile, are being migrated to MTN’s network over a three-year time horizon.

“It’s not like we are getting rid of subscribers because we can’t cope. We have had a phenomenally good year,” Craigie Stevenson said of the financial year ended 31 December 2020. “We will deliver a strong set of results.”

The decision to shut down its own physical RAN and buy services instead from MTN – and now Vodacom – has already slashed Cell C’s capital expenditure, he said. And the business is growing its subscriber base and winning back customers despite the capex cut.

Craigie Stevenson said Cell C’s agreements with both MTN and Vodacom give the company the capacity to negotiate when buying wholesale services. “It gives us the best pricing and it gives us a competitive advantage without draining our balance sheet and our funding.”

He said Cell C will entertain a similar arrangement with the planned wholesale open-access network (Woan) when it is eventually launched. (The Woan, a brainchild of the government but which will be privately owned, is meant to provide wholesale access to mobile infrastructure to other licensed carriers, encouraging competition in telecoms services.)

On the long-delayed planned recapitalisation of Cell C, Craigie Stevenson said a deal is not only “on track” but should be announced soon.

He said the recent retrenchments programme has now been concluded. Almost 1 200 employees were impacted by the process, leaving a headcount of 1 338. About 250 staff are being reskilled for new positions in the areas of digital marketing, “technopreneurship” and data science.

A rationalisation of Cell C retail stores is still ongoing as part of an 18-month process that will see roughly half, or about 130, of its stores closed permanently. To date, it has closed 56. 

Source: NewsCentral Media

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