Cell C dead by 2014: analyst
Paul Theron, CEO of Vestact Limited, argues that Cell C has decimated its own business case and will be dead within six months.
Speaking on CNBC, Theron said that Cell C is messing up the mobile market in South Africa for everyone, including themselves, with their aggressive pricing strategy.
Theron said that Cell C is “basically burning the furniture over there to stay in business,” and had to raise more money to remain afloat.
“Cell C will be dead within 6 months. Listen to me now – they are under such pressure that they basically decimated their own business chasing market share,” said Theron.
Theron added that if Alan Knott-Craig is still the CEO of Cell C in six months’ time he will be very surprised.
Knott-Craig took the reins at Cell C in April 2012, and was quick to cut prices to gain market share. To date Cell C has been moderately successful, but the company remains under pressure financially.
He recently told MyBroadband that effective regulation and asymmetric interconnect rates are vital to a vibrant telecommunications market in South Africa, and to assist smaller players like Cell C.
The Cell C CEO added that it remains possible for Cell C to gain a 25% share of South Africa’s cellular market, but only with regulatory intervention to create a more even playing field.
Cell C as well as Oger Telecom, the Lebanese-controlled firm which has an indirect 75% holding in the SA operator, were asked for comment about Theron’s predictions, but the companies did not provide feedback by the time of publication.
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