TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      Moves afoot to fix Eskom’s debt problem

      4 July 2022

      Audi South Africa to offer free connectivity upgrades

      4 July 2022

      Shock fuel price increase announced

      4 July 2022

      Wiocc’s data centre business, OADC, appoints CEO

      4 July 2022

      Google’s Equiano cable lands in Namibia

      3 July 2022
    • World

      Tether fails to calm jittery nerves

      4 July 2022

      EU to impose wide-ranging new rules on the crypto industry

      3 July 2022

      Crypto hedge fund Three Arrows files for bankruptcy

      3 July 2022

      Meta girds for ‘fierce’ headwinds

      1 July 2022

      Graphics card prices plummet as crypto demand dries up

      30 June 2022
    • In-depth

      The NFT party is over

      30 June 2022

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022

      Everything Apple announced at WWDC – in less than 500 words

      7 June 2022
    • Podcasts

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022

      Everything PC S01E04 – ‘The story of Intel – part 2’

      1 June 2022
    • Opinion

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Opinion»Duncan McLeod»Cell C? 8ta da!

    Cell C? 8ta da!

    Duncan McLeod By Duncan McLeod17 October 2012
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    Cell C CEO Alan Knott-Craig told me in an interview about three weeks ago that SA’s telecommunications industry was “not sustainable” and that a wave of consolidation was coming, probably within the next six months.

    That the former Vodacom boss, who took the reins at Cell C earlier this year, wants to shake up SA’s telecoms sector is clear. He wants to carve out a much bigger slice of the market for Cell C — up to 25% from 13% now — and he’s prepared to tear up the rule book to achieve his goal. So far, that’s meant slashing prices and removing the tariff complexities for which the industry is (in)famous.

    His game plan is far bigger than just upending tariffs, though. When we spoke, Knott-Craig said he expected smaller telecoms players to reach out to one another in an effort to build scale to take on industry giants MTN and Vodacom. He specifically named Cell C, Neotel and Telkom, along with its mobile arm, 8ta, and hinted he was already involved in talks that could spur consolidation in the sector.

    “Cell C, 8ta, Neotel and Telkom are four small players in the market — I separate 8ta and Telkom because I can — and they need scale,” he told me. “Who merges with whom? I don’t know. I think that will pan out as it pans out.”

    How might this consolidation really happen? It’s an intriguing question.

    Even if Telkom were able to muster government support to buy Cell C (far from a given), would the competition authorities allow it and, if they did, could the company afford to do the deal?

    Looking at it the other way around, could Cell C raise the billions it would need to buy a stake in Telkom? Why would it want to buy into a troubled incumbent fixed-line operator and, again, would government, which has already sent Korea’s KT Corp packing this year, allow it?

    Perhaps Cell C would be interested in buying (rescuing?) 8ta, leaving Telkom as a wire-line player only. The country’s newest mobile operator is hurting its parent financially — 8ta is “busy drowning Telkom”, in Knott-Craig’s words — but the fixed-line operator arguably can’t do without a mobile arm. Mobile is a key ingredient in its broadband strategy.

    Though an equity transaction involving Cell C and Telkom/8ta appears unlikely (but not impossible), the opportunity for a closer working relationship makes sense. Of all of SA’s operators, Telkom has by far the largest fibre-optic backbone network, a valuable asset in wiring up base stations for fourth-generation (4G) mobile broadband technology. It also has access to a huge chunk of highly prized radio frequency spectrum that is well suited to 4G.

    Cell C, on the other hand, has a retail and channel presence that 8ta has struggled to build. Though it’s not as strong as MTN and Vodacom in this regard, Cell C certainly has the people, processes and systems in place to support end users, an area where 8ta has come up short. Together, the companies have more base stations than Vodacom, an asset which, if leveraged properly, especially in combination with Telkom’s 4G spectrum assets, could give both parties a strong competitive advantage.

    How the talks now taking place will reshape the industry is anyone’s guess. But that Knott-Craig wants to shake up the sector — and do it quickly — is now evident to everyone.

    “There’s no time to do this organically anymore, ” he told me. “Everyone recognises the status quo is not sustainable.”  — (c) 2012 NewsCentral Media

    • Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
    8ta Alan Knott-Craig Cell C MTN Neotel Telkom Vodacom
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleOpen Microsoft, closed Apple
    Next Article Is the PC era over?

    Related Posts

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Huawei, MTN to help build 5G-powered ‘smart mine’

    30 June 2022

    Cell C recap meeting rescheduled after failing to reach a quorum

    21 June 2022
    Add A Comment

    Comments are closed.

    Promoted

    The MSP value proposition has evolved – here’s why it matters

    4 July 2022

    Presenting the cloud finance in South Africa survey with AWCape and Sage

    4 July 2022

    The Equiano cable has landed

    4 July 2022
    Opinion

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.