Cell C is making the right moves to shake up South Africa’s cellphone industry and to take significant market share from bigger rivals Vodacom and MTN.
That’s the view of Brett Levy, co-CEO of the giant JSE-listed cellular airtime distributor Blue Label Telecoms.
“Cell C will give this market a real run for its money,” Levy says. South African consumers are pretty lethargic and we sometimes don’t want to change because we’re lazy, but if you analyse the pricing Cell C has gone out with, no matter how Vodacom and MTN want to disguise their pricing, they’re nowhere close to [Cell C’s]. If Cell C does the right marketing, which they are starting to, it’s only a matter of time until consumers realise it’s 50% cheaper than anything else out there…”
Levy says Cell C’s introduction of its 99c/minute products, which are billed for on a per-second basis and at the same rate to all networks, was a smart move.
“I believe if they do the right marketing, the perception of the market will change because the offering is so good,” says Levy.
He also praises Vodacom, which has retaliated with new prepaid products of its own, including 57 minutes of free on-network talktime for every three minutes paid for. However, Levy cautions that Cell C’s bigger rivals aren’t able to strike back as hard because of their larger customer bases and the impact it would have on their financial performance.
“We were very close to [Cell C CEO] Alan [Knott-Craig] when he was [CEO of] Vodacom. This was a key driver of Blue Label’s success. At Cell C, we have no doubt he will back us,” Levy says.
He adds that he expects Cell C will make big market share gains over the next three to five years and thinks Knott-Craig’s target of taking 20-25% of the market is not out of reach.
“We will be there, we will enjoy the ride and we will watch this story unfold and we think they have a bloody good chance of achieving this. But we like Vodacom as well. They are not just sitting back. They are also starting to fight.”
Blue Label co-CEO Mark Levy adds that the bigger cellular operators “won’t just roll over”.
“We’re in a great position: if there’s no distribution there’s no product availability. Blue Label is able to get the best of all these deals because [the operators] need us to distribute these products in the marketplace.” — (c) 2013 NewsCentral Media
