{"id":47858,"date":"2013-10-20T23:56:41","date_gmt":"2013-10-20T21:56:41","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=47858"},"modified":"2013-10-21T09:08:47","modified_gmt":"2013-10-21T07:08:47","slug":"stop-aggressive-price-cuts-cell-c-analyst","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/mobile\/47858\/stop-aggressive-price-cuts-cell-c-analyst\/","title":{"rendered":"Stop aggressive price cuts, Cell C"},"content":{"rendered":"

An analyst has cautioned Cell C<\/a> to rein in on its price cutting initiatives, at least until it is able to\u00a0sustain its network quality.<\/p>\n

Since the appointment of Alan Knott-Craig<\/a> as Cell C CEO in January 2012, the group has shaken up the market with aggressive pricing models, a strategy which has paid off in terms of upping its subscriber base.<\/p>\n

The mobile operator noted earlier this month (October) that it had signed up one million gross customers in September, having achieved that milestone for the first time in July.<\/p>\n

The company told BusinessTech that it fell marginally short of reaching a target of one million subscribers in August, meaning that its gross sign-ups was close to three million over the past three months.<\/p>\n

\u201cWe have grown our base by 33% to 12.3 million customers in just 18 months,\u201d Knott-Craig told delegates at the\u00a0MyBroadband 2013 conference in Midrand.<\/p>\n

In July 2013, Cell C revealed that it had 11.7 million subscribers on its network \u2013 a steady climb from 8.2 million users in 2011 and 9.4 million in 2012 \u2013 boosting its relative market share to over 17%.<\/p>\n

Knott-Craig has said that the company is targeting 25% market share in order to be profitable.<\/p>\n

However, Cell C’s network has suffered in the process, something that Knott-Craig has vowed to fix.<\/p>\n

Nick Crail<\/a>, Portfolio Manager at RMB Private Bank<\/a> said that, with three million net customer gains over the last 18 months, “Cell C needs its infrastructure to be able to sustain network quality.”<\/p>\n

“Personally, my hope is that over the next year we won\u2019t see aggressive price cuts but rather Cell C making more money and investing heavily on infrastructure and then perhaps start trying to aggressively attract new clients,” he said.<\/p>\n

Vodacom and MTN<\/strong><\/p>\n

Crail noted the impact of Icasa<\/a>‘s\u00a0proposed MTR glide path on Vodacom<\/a> and MTN<\/a>, and\u00a0particularly\u00a0the former because of its reliance on the local market.<\/p>\n

However, on the extent of the impact, he said: “It is tough to tell as it will depend on what the competition (Cell C and Telkom Mobile<\/a>) does with pricing and strategy of gaining market share.”<\/p>\n

“All else being equal, Vodacom will lose 2-3% ebitda (earnings before interest, taxes, depreciation, and amortization) with MTN a lot less. The main question is what effect these proposed MTR cuts will have on pricing. This depends on Cell C\u2019s strategy,” Crail said.<\/p>\n

“It is imperative for new spectrum to be awarded to all players in the short to medium term,” he said of the industry as a whole.<\/p>\n

More on Cell C<\/h3>\n

Cell C subscriber growth soars<\/strong><\/a><\/p>\n

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

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

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

An analyst has cautioned Cell C to rein in on its price cutting initiatives, at least until it is able to sustain its network quality.<\/p>\n","protected":false},"author":9,"featured_media":8572,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[43,42,26,28,1075,27],"class_list":["post-47858","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","tag-alan-knott-craig","tag-cell-c","tag-headline","tag-mtn","tag-telkom-mobile","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/47858","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\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=47858"}],"version-history":[{"count":9,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/47858\/revisions"}],"predecessor-version":[{"id":47918,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/47858\/revisions\/47918"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/8572"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=47858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=47858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=47858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}