Levy told a media gathering in Sandton on Wednesday (20 February) that mobile operators MTN and Vodacom are “nowhere near” Cell C’s new pricing – and it is only a matter of time before the consumer realises how much cheaper South Africa’s third operator is.
Currently, Blue Labels’ airtime distribution chart in revenue terms is dominated by Vodacom, at 51%, followed by MTN at 37%. Cell C constitutes 10% of the group’s distribution revenue, with Telkom at 2%.
The group puts its new connections for prepaid airtime and mobile starter packs at 450,000 per month.
Levy said that the “real impact” of Cell C’s re-emergence into the mobile sector under the leadership of Alan Knott-Craig will be seen within three to five years. The chief executive has said in the past that Cell C can achieve a market share of between 20-25%.
“They (Cell C) can definitely get to 20-25%…it’s not going to be easy…it’s going to be a bun fight. We do believe they will give this market a real run for its money,” Levy said.
The joint company lead said that South African consumers were lethargic, and didn’t change their operators despite better pricing models offered by competitors.
“If you look at Cell C, MTN and Vodacom are nowhere near Cell C’s new pricing…it’s only a matter of time before the consumer realises how much cheaper Cell C is,” Levy said, pointing to cases where the operator was 150% cheaper than its competitors.
He continued that if Cell C perfected its marketing strategy, “the perception of the market will change. I don’t think that Vodacom and MTN can follow them on that basis.”
“We are excited, they (Cell C) are at the bottom, there is only up for them. We are going to enjoy the ride. We think they have a good chance of achieving what we think they are going to achieve,” Levy said.
Blue Label didn’t rule out Vodacom’s ability to react to market pressure.
“They are not just sitting back…Vodacom is starting to fight. What Vodacom is doing is very clever. They have a good perception of the market, something that Cell C still needed to get a handle on,” Levy said.
“This market is becoming exciting, we are in the slip stream,” he said.
He noted that consumers would also benefit. “The more they fight, they more the consumer wins,” he said.