Financially strained telecommunications operator Cell C said on Wednesday that it has finalised a term sheet for a further national roaming agreement with rival MTN South Africa.

The new agreement is “mutually beneficial to both parties”, Cell C said. “Under the terms of the agreement, Cell C will be able to manage its network capacity requirements in a more scalable and cost-efficient manner.”

Cell C CEO Douglas Craigie Stevenson said in a statement that the new agreements “lays the groundwork for a broader national roaming agreement, supporting the policy goals of avoiding network duplication and the burden on the environment, where shared infrastructure drives efficiencies in the delivery of services to consumers”.

He said the agreement with MTN is “in line” with Cell C’s promise to “drive efficiency throughout the business”.

In a statement to shareholders, Cell C’s largest shareholder, JSE-listed Blue Label Telecoms, said the new agreement will result in “substantial cost-savings for Cell C by reducing network and capex spend through an extensive roaming arrangement”. The parties are now negotiating a “long-form agreement that will detail the principles set out in the term sheet”.

Cell C and MTN signed a roaming agreement in November 2018, which saw the former move its roaming traffic from Vodacom. It also gave Cell C access to roaming 4G/LTE services for the first time.

“Led by Craigie Stevenson, the new Cell C management team has been actively pursuing the business priorities of recapitalising the business, managing value from the original roaming agreement with MTN, and optimising the revenue and usage from the network,” Cell said in its statement.

‘Sustainable’

“We believe that this agreement brings us closer to strategically positioning Cell C to be a strong participant in the industry and establishes a path towards sustainability,” said Craigie Stevenson. “Execution will ensure that Cell C remains a sustainable and competitive player with improved network access and quality.”

He said the new deal “lays the foundation for Cell C for a quicker, more efficient and more cost-effective means to roll out future technologies, while ensuring the legacy services like 3G and 2G are suitably rationalised”.