{"id":44980,"date":"2013-08-29T23:16:20","date_gmt":"2013-08-29T21:16:20","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=44980"},"modified":"2013-08-30T09:13:24","modified_gmt":"2013-08-30T07:13:24","slug":"cell-cs-knott-craig-warns-backers-may-stop-investing","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/mobile\/44980\/cell-cs-knott-craig-warns-backers-may-stop-investing\/","title":{"rendered":"Cell C’s Knott-Craig warns backers may stop investing"},"content":{"rendered":"

Cell C<\/a> CEO, Alan Knott-Craig<\/a> says that the group\u2019s recent $350-million\u00a0cash injection is subject to “satisfactory regulatory outcomes”, adding that the group’s coffers may stop investing under the current\u00a0regulatory framework.<\/p>\n

In July, South Africa’s third operator\u00a0received\u00a0a boost from\u00a0Oger Telecoms<\/a>,\u00a0the Lebanese-controlled firm with an indirect 75% holding in Cell C,\u00a0which invested a further $350 million while additional key lenders \u201cincluding\u00a0Nedbank<\/a>\u00a0and the\u00a0Development Bank of South Africa<\/a>\u201d provided a sum of R2.2 billion.<\/p>\n

Knott-Craig said that the money would be primarily\u00a0used for network roll-out, particularly in the Gauteng area, which has seen voice traffic double over the past year and a bit.<\/p>\n

Earlier this month (22 August 2013)\u00a0Cell C\u00a0announced that it would\u00a0roll out an additional 100 sites in Johannesburg over the next three months at a cost of R200 million, in\u00a0an effort to alleviate its strained network in the province.<\/p>\n

However, the company lead stressed that if the\u00a0regulatory framework in SA is not conducive to investment, his backers wouldn’t invest.<\/p>\n

Knott-Craig\u00a0told CNBC Africa earlier this week:\u00a0\u201cI must say that the injection is subject to satisfactory regulatory outcomes. What they are saying is, if the regulatory framework in this country is conducive to investment, they will invest.”<\/p>\n

“If the regulatory framework in this country is not conducive to investment, then clearly they won\u2019t invest. So it is important that we get our regulatory framework correct. Right now it\u2019s not.\u201d<\/p>\n

The industry veteran opined that, in general, South Africa has never been good at regulating the telecommunications space.<\/p>\n

\u201cEssentially it goes around MTRs (mobile termination rates)\u2026and the second thing is symmetry,” he said, adding that while regulators did it with MTN<\/a> and Vodacom<\/a> until only recently, the same did not apply for 8ta (now Telkom Mobile<\/a>) or Cell C when they came into the market as a third and fourth operator.<\/p>\n

\u201cThese two operators, for that reason, never got off the ground,\u201d he said.<\/p>\n

“The reason why you licence a third and fourth operator when you are heading toward 100% saturation anyway, is only to get prices down. If you don\u2019t make it possible for them to be financially sustainable in taking market share from other operators – which is the only way prices come down anyway – then don\u2019t do it; don\u2019t license them and be happy with the status quo.\u201d<\/p>\n

Knott-Craig pointed out that the $350 million cash injection continues to flow, \u201cits not just one shot\u201d.<\/p>\n

“They decided to put the money in because the regulator did decide to look at the remedies, and do so urgently,” he said, highlighting a deadline of October 26.<\/p>\n

The Independent Communications Authority of South Africa (Icasa<\/a>) has promised an extensive review of the South African telecommunications sector, with publication of final call termination regulations expected on 25 October 2013.<\/p>\n

Some analysts have questioned Cell C’s survival, while\u00a0Knott-Craig has himself said that operators needed a minimum of 25% market share in order to be profitable.<\/p>\n

The operator announced recently that it had signed up one million customers in July 2013, taking its subscriber base to 11.7 million and giving it a market share of around 15%.<\/p>\n

More on Cell C<\/h3>\n

Cell C network \u201cperfect\u201d by November: CEO<\/strong><\/a><\/p>\n

Cell C admits network \u201ctaking strain\u201d<\/strong><\/a><\/p>\n

Cell C dead by 2014: analyst<\/strong><\/a><\/p>\n

Cell C sign-ups boom\u00a0<\/a><\/strong><\/p>\n

Cell C seeks profitability within 3 years<\/strong><\/a><\/p>\n

Cell C: where the billions will go<\/strong><\/a><\/p>\n

Cell C network quality complaints<\/strong><\/a><\/p>\n

Cell C\u2019s massive virtual network plans<\/strong><\/a><\/p>\n

Cell C network problems explained<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Cell C CEO Alan Knott-Craig says that the group\u2019s recent $350-million cash injection is subject to satisfactory regulatory outcomes.<\/p>\n","protected":false},"author":10,"featured_media":23679,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[34],"tags":[43,42,6028,26,28,1799,6317,1075,27],"class_list":["post-44980","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","tag-alan-knott-craig","tag-cell-c","tag-development-bank-of-south-africa","tag-headline","tag-mtn","tag-nedbank","tag-oger-telecoms","tag-telkom-mobile","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/44980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=44980"}],"version-history":[{"count":14,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/44980\/revisions"}],"predecessor-version":[{"id":45002,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/44980\/revisions\/45002"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/23679"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=44980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=44980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=44980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}