Cell C’s plan to sell its network of base stations should be concluded within the next four weeks, says CEO Lars Reichelt.
In March, TechCentral broke the news that SA’s smallest mobile operator was considering selling parts of its base station network, and then leasing that infrastructure back from the winning bidder.
Reichelt confirmed earlier this year that the company was in discussions with three bidders. Two companies believed to be in the running were Eaton Telecom and American Tower Corp.
In interview with TechCentral last month, Eaton Telecom CEO Alan Harper said it would make an announcement about SA deals in the coming quarter, prompting speculation it had bagged the Cell C deal.
Cell C’s plan is to sell the passive components of its base stations and not the active components, like the radio equipment mounted on the towers. The company will then lease back space on the towers from the winning bidder.
The deal should help the company defray debt.
Cell C’s network is valuable to potential tower operators. It covers one third of SA’s geographic area and 87% of the country’s population.
Analysts have broadly welcomed the operator’s plans, saying infrastructure sharing is a worldwide trend.
As pressure mounts on operators’ revenues and profit margins, and particularly as business models shift from voice services to data, they need to find ways of reducing their operating costs.
The company has also engaged in several outsourcing deals that will help cut costs.
Cell C field marketing will now be handled by the Smollan Group, and its contact centre services will be managed by Dimension Data subsidiary Merchants.
In all, Cell C has transferred 730 employees to the two outsourced businesses. — Candice Jones, TechCentral