No space for 4 mobile players in SA: Knott-Craig

Cell C CEO Alan Knott-Craig believes that the current South African market is not conducive for four profitable mobile operators.

Knott-Craig was answering questions at Cell C’s headquarters in Sandton on Wednesday (17 July).

He said that it was probably too late by as much as seven years to have a fourth operator in the market.

Cell C launched in 2001, as the country’s third mobile operator, joining MTN and Vodacom. Roll on nearly ten years, and Telkom launched its own mobile division, 8ta in October 2010. The 8ta brand has subsequently morphed into a new brand, Telkom Mobile.

Telkom unbundled its 50% stake in Vodacom in 2009.

Knott-Craig said that an ideal situation would see four operators each with a market share of 25%; however, that isn’t the case.

In June, Telkom’s financial reports revealed that it only had 1,534,265 active mobile subscribers at 31 March 2013, up 3.4% from a year earlier.

In comparison, Cell C currently claims a 14% market share in SA, while Vodacom’s share is over 52% with more than 30 million subscribers, and MTN, with in excess of 25 million subscribers, has an approximate share of 33%.

A veteran in the industry, Knott-Craig opined that operators needed a minimum of 25% market share in order to be profitable, something he said Cell C is working at achieving over the next few years, having seen its customers swell to 11.5 million, from 9 million over the past 18 months.

On Wednesday (17 July), Cell C announced a new pre-paid product under the Red Bull Mobile brand that gives subscribers 200MB per month for 12 months for R99 once-off.  Knott-Craig said that smaller operators would have to introduce clever promotions like its partnership with Red Bull in order to claim a bigger market share.

More on Cell C

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Cell C talking to MVNO players: report

Telkom dismisses Cell C merger talks

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No space for 4 mobile players in SA: Knott-Craig