CELL C will spend R2.4bn this year in growing its mobile network as it prepares for the commercial launch of the high-speed, long-term evolution (LTE), or 4G, network.
Cell C’s clients in many areas, especially in Gauteng, have complained about the network’s poor quality. But over the past few years, the group has been investing billions of rand to expand and upgrade its network capacity to cater for the growing customer base. Rivals MTN and Vodacom are each spending north of R5bn per year.
But despite having to compete with two big rivals, the company has grown its market share after years of stagnation. Cell C has increased its customers to about 19.5-million.
CEO Jose dos Santos said the group had "survived" the intense competition and, like any business when there were regulatory or economic challenges, it adjusted its business accordingly and found new revenue.
He said this year and beyond, the group would put a "lot of emphasis on data".
"We are enhancing our network quality and redefining who we are," said Mr dos Santos.
In December, Cell C completed its intensive Radio Access Network (RAN) upgrade project in Gauteng as part of its R2.5bn capital investment. The upgrade entailed the replacement of out-dated network equipment on 1,215 base stations in Gauteng.
Cell C will introduce similar projects in other metro regions. Mr dos Santos would not say when the LTE network would be launched but said it was imminent.
Cell C is weighing its options on whether to legally challenge the call termination rates — fees mobile network operators pay when their subscribers call a competitor’s customers. Mr dos Santos said the group was not happy with the outcome. "It is unjust and consumers will not benefit."
The base rate, which will be paid by small rivals to MTN and Vodacom, will remain 20c until the end of September this year, then decline to 16c until September 2016, and then to 13c.
But the asymmetric rate, which is paid by MTN and Vodacom to their smaller rivals, dropped from 44c to 31c. The rate will drop to 24c in October this year and to 19c in 2016. The reduction will result in a significant cut in income for Cell C.
Cell C has lobbied for years for a favourable, higher, asymmetric rate to support its growth. "We are getting less revenue but like any business we have to find new revenue alternatives," he said.
The new revenue streams include partnerships with companies such as Mr Price, which are using Cell C’s network to offer voice and data services to clients. First National Bank is also expected to launch mobile services in partnership with Cell C.
On Friday, Cell C lodged an application with the High Court in Johannesburg; a bid to access all the information that led to the regulator’s decision to further reduce call termination rates.
Source: http://www.bdlive.co.za/business/technology/2015/01/26/cell-c-allots-r2.4bn-for-4g-expansion
