Cell C LCR service may hurt Vodacom and MTN
Cell C announced in early May that it has launched a niche business product for least cost routing (LCR) providers, called LCR AnyNet, slashing previous wholesale LCR rates.
LCR AnyNet costs R150 per SIM per month and will provide a flat-rate of 99c across mobile networks and 60c to fixed-line networks.
To date, Vodacom and MTN have not responded to Cell C’s new LCR product, and according to an industry player, the two cellular giants stand to lose millions in revenue if they wait any longer.
Cell C’s new LCR AnyNet product offers LCR providers far higher margins on their current retail rates, which means that it makes financial sense to replace all their current Vodacom and MTN SIMs with Cell C LCR SIMs.
Most LCR providers currently use mainly Vodacom and MTN SIMs for their operations, but this is changing with Cell C’s new LCR AnyNet product.
One large LCR provider has already ordered thousands on Cell C SIMs, and he told MyBroadband BusinessTech that he is trying to replace his Vodacom and MTN SIMs with Cell C SIMs as fast as he can.
According to the LCR provider, Vodacom and MTN have been less than enthusiastic to cut their rates to fall in line with Cell C’s new prices. This, he said, will mean that most LCR providers will simply start using Cell C instead of Vodacom and MTN.
Cell C confirmed the positivity in the LCR market about their new LCR Anynet product. “LCR AnyNet has been very well received by Cell C’s business partners, judging by their comments in the media and their interaction with our own sales team,” said Cell C CEO Alan Knott-Craig.
With millions of monthly LCR millions at stake one would have expected MTN and Vodacom to be scrambling accommodate their wholesale LCT partners, but the two operators seem unfazed by the situation.
Vodacom said that they are currently monitoring the situation, but do not have any specific plans to announce at this stage.
MTN did not respond to questions as to whether they plan to cut rates to LCR wholesalers to remain competitive in the market.
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